Permanent Current Assets Reflect the Fact That Current Assets Do

question 74

True/False

Permanent current assets reflect the fact that current assets do not shrink to zero even when business is at a seasonal or cyclical low.Thus,permanent current assets represent a minimum level of current assets the firm must finance.

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Definitions:

Disposal

The process of getting rid of something, especially by throwing it away or by selling it.

Accumulated Depreciation

Accumulated depreciation is the total amount of depreciation expense that has been recorded for an asset since it was put into use, reducing its book value on the balance sheet.

Goodwill

An intangible asset that is created from such favorable factors as location, product quality, reputation, and managerial skill.

Boot

The remaining amount a buyer owes after the trade-in allowance when a fixed asset is traded in for a similar asset.