A Company That Produces Drugs Is Preparing a Balance Sheet

question 82

Multiple Choice

A company that produces drugs is preparing a balance sheet. Which of the following would be most likely to be considered a long-term asset on this balance sheet?

• A) commercial paper held by the company
• B) the inventory of chemicals used to produce the drugs made by the company
• C) a patent for a drug held by the company
• D) the cash reserves of the company

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Definitions:

Prior Period Adjustments

Corrections of errors in financial statements of previous periods or adjustments for changes in accounting policies.

Net Losses

The amount by which a company's expenses exceed its revenues over a specific period, indicating a financial loss.