Which of the following is true of current assets?Group of answer choicesCurrent assets are listed according to the degree of liquidity of each asset.Current assets can be divided into long-term assets and fixed assets.Current assets are those assets that are held for two years or more.Current assets are those assets which cannot be liquidated.
Question
Which of the following is true of current assets?Group of answer choicesCurrent assets are listed according to the degree of liquidity of each asset.Current assets can be divided into long-term assets and fixed assets.Current assets are those assets that are held for two years or more.Current assets are those assets which cannot be liquidated.
Solution
The correct statement about current assets is: "Current assets are listed according to the degree of liquidity of each asset."
Explanation: Current assets are assets that a company expects to convert to cash or use up within one year or its operating cycle, whichever is longer. They are listed on the company's balance sheet and typically include cash, accounts receivable, inventory, and other items that can be quickly converted to cash or used to pay current liabilities. They are listed according to their degree of liquidity, meaning how quickly they can be converted into cash.
The other statements are incorrect. Current assets are not divided into long-term assets and fixed assets. Those are separate categories of assets. Current assets are not necessarily held for two years or more. In
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