Of the Following Items, the One That Should Be Classified

question 35

Multiple Choice

Of the following items, the one that should be classified as a current asset is

• A) Trade installment receivables normally collectible in 18 months
• B) Cash designated for the redemption of callable preferred stock
• C) Cash surrender value of a life insurance policy of which the company is beneficiary
• D) A deposit on machinery ordered, delivery of which will be made within six months

---

Definitions:

Employer

An individual or organization that hires and pays individuals for their labor or services.

FICA

Federal Insurance Contributions Act; a U.S. law that requires a payroll tax on both employees and employers to fund Social Security and Medicare.

Social Security

A government program providing economic assistance to people with an inadequate or no income.

Yellow-Dog Contracts

A type of employment agreement where the worker promises not to join a labor union during the term of employment.