Which of the following are period costs? Investment in equity securities for the purpose of controlling the issuing company. Comment * Related User Ask Questions. Accounting Mcqs for Preparation of various Test announced by Fpsc, kppsc, Nts, ppsc. Currents assets are detrimental to operations of the business, paying vendors, from cash, disposing inventory to customers for receipt of inocme (revenue), you name it. prepaid expenses.b. Taft Inc. borrowed $1,000,000 from Wilson Company on July 2, year 8. Tangible Assets Examples include Land, Property, Machinery, Vehicles etc. In Current Ratio, Current Assets are compared with: (a) Current Profit, (b) Current Liabilities, (c) Fixed Assets, (d) Equity Share Capital. b. tangible fixed assets back into cash, or 12 months, whichever is longer. The Widget Co.'s current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and net working capital of $725,000. Current assets are a category on the asset side of the balance sheet which majorly comprises of cash and bank balance, inventories, account receivables/debtors. Description of assets or liabilities with estimable fair values. They act as the wheels for the smooth running of the business. Assume the following data: Current assets = $500; Current liabilities = $250; Inventory = $200; Account receivables = $200. Ownership: Assets represent ownership that can be eventually turned into cash and cash equivalents. Current assets for the balance sheet. Inventory III. Principles of Accounting, Accounting Equation, Analyzing & Classifying Transaction, Journal, Ledger, Banking Transactions, Cash book and Bank Reconciliation Statement, Bill of Exchange, Capital & Revenue, Rectification of Errors, Final Accounts, Adjustments. Cash: Cash includes accounts such as the company’s operating checking account, which the business uses to receive customer payments and pay business expenses, or an imprest account, which keeps a fixed amount of cash in it (such as petty cash). Total assets 30,000. The current ratio is calculated by dividing total current assets by total current liabilities. Which current liability would be listed Cash surrender value of a life insurance policy of which the company is the beneficiary. 1 A patent for a new glue purchased for $20,000 by Iota Co accounts receivable 1. Here, the operating cycle means the time it takes to Which of the following are included in current assets? Non-Current Assets are an integral part of any business. Explore answers and all related questions . Current assets have a relatively shorter life as compared to fixed assets and sometimes current assets are also termed as liquid assets. These Mcqs are very helpful for the Preparation of various posts of Senior Auditor, Junior Auditor, Accountant and for Cost Accountant. iv. 2000 Bills payable = Rs. Cash C. Accounts receivable D. Net receivables 2. cash A. II and IV only 2. Current assets would consist of all liquid assets in a business, which will be used to cover the net working capital and the business liquidity. capital stock is not an asset How Current Assets Information is Used Creditors are interested in the proportion of current assets to current liabilities , since it indicates the short-term liquidity of an entity. Assets which physically exist i.e. Stock Debtors Join The Discussion. After current assets, the balance sheet lists long-term assets, which include fixed tangible and intangible assets. accounts payable IV. current assets include cash and cash equivalents, accounts receivable, marketable securities, prepaid expenses, debtors etc. An alternative expression of this concept is short-term vs. long-term assets. C. Debators. Examples of current assets and the typical order of liquidity include: Cash and cash equivalents (which includes currency, checking accounts, petty cash, some U.S. Treasury Bills) Temporary investments; Accounts receivable; Inventory Required fields are marked *. The total current assets of the Company increased by 2.09% from $ 128,645 Mn to $ 131,339 Mn in 2017 and 2018, respectively. A) Prepaid rent B) Taxes payable C) Automobiles D) Common stock E) None of the above $2,974 10. Assets that are reported as current assets on a company's balance sheet include: Cash, which includes checking account balances, currency, and undeposited checks from customers (if the checks are not postdated) Petty cash. Current assets are the key assets that your business uses up during a 12-month period and will likely not be there the next year. c. Cash designated for the purchase of tangible fixed assets. Also, have a look at Net Tangible Assets These Mcqs are very helpful for the Preparation of various posts of Senior Auditor, Junior Auditor, Accountant and for Cost Accountant. Tangible Non-Current Assets are usually valued at Cost Less Depreciation. Which of the following current assets is the LEAST liquid? Which of the following are/is a current asset? IF YOU THINK THAT ABOVE POSTED MCQ IS WRONG. These are short assets which are liquid and can be converted in to cash within a short span of time i.e. PLEASE COMMENT BELOW WITH CORRECT ANSWER AND ITS DETAIL EXPLANATION. A hotel prepares it balance sheet in USALI recommended format. The current assets include petty cash, cash on hand, cash in the bank, cash advance, short term loan, accounts receivables, inventories, short term staff loan, short term investment, and prepaid expenses. B) Funds flow in a transaction between current asset and capital C) Funds Cash in hand. Your email address will not be published. Current assets generally sit at the top of the balance sheet. B. and C. above. Which of the following is not a primary function of a Bank? Resource: Assets are resources that can be used to generate future economic benefits 4. Current Assets: Current assets would consist of all liquid assets in a business, which will be used to cover the net working capital and the business liquidity. 1. 1. However, it is worthwhile to note that not all Tangible Non-Current Assets depreciate in value. These include stock, inventory, fixed deposits, bank balance, prepaid expenses etc. Examples of Current Assets. 2. Accounting Mcqs. Current Assets vs. Non-current Assets Current assets are assets that are primarily held for trading or which are expected to be sold, used up or otherwise realized in cash within the greater of a year or one business operating cycle, after the reporting period. Cash Trademark Accounts Receivable IV. a business cycle. According to IAS 38 Intangible assets, which of the following are intangible non-current assets in the financial statements of Iota Co? A current asset is one that has a useful life of one year or less. accounts payable IV. Which of the following statement/s are true about movement of funds? Current assets on the balance sheet B. A)instalment notes receivable due over eighteen months, in accordance with normal trade practice B)prepaid taxes, which cover assessments for the current year C)equity or debt securities purchased with cash available for current operations D)franchises and copyrights 1. Current assets are short-term, liquid assets that are expected to be converted to cash within one fiscal year. This is the account used to deposit revenues and pay expenses. However, the portion of the asset base comprising of long term assets varies industry-wise. They are also always presented in order of liquidity starting with cash. A) Prepaid rent B) Taxes payable C) Automobiles D) Common stock E) None of the above $2,974 10. … Stock Cash usually includes checking account, coins and paper money, undeposited receipts and money orders.The excess cash in normally invested in low risk and highly liquid instruments so that it can generate additional income. The basis for classifying assets as current or noncurrent is the period of time normally required by the accounting entity to convert cash invested in a. receivables back into cash, or 12 months, whichever is longer. A. 1 Non-current assets Non-current assets are distinguished from current assets by the following characteristics: they: are long-term in nature are not normally acquired for resale are could be tangible or intangible are used to generate © Copyright 2016-2020 - www.PakMcqs.com/. Which one of the following is classified as an intangible fixed asset? Which of the following should NOT be considered current assets in the statement of financial position? Usually, These Mcqs are very helpful for the Preparation of various posts of Senior Auditor, Junior Auditor, Accountant and for Cost Accountant. B. b. accounts receivable. accounts receivable Incorrect. Pretty much all accounting systems separate groups of assets into different accounts. Non-current assets have a useful life of longer than one year. Pre-paid expenses which can be touched. iii. These assets include cash and cash equivalents, marketable securities, accounts receivable, inventory and supplies, prepaid expenses, and other liquid assets. 3. I. patent II. this is typically a current asset. 3-Current assets include all of the following, except: Select one: a. accounts payable. Short-term assets that relate more to financing issues, such as marketable securities and assets held for sale, are not considered part of operating current assets. … capital stock Correct. Accounting Mcqs for Preparation of various Test announced by Fpsc, kppsc, Nts, ppsc. Use the following balance sheet and income statement information to answer questions 20 23: Current assets $ 7,000 Net income $ 12,000 Current liabilities 4,000 Stockholders equity 27,000 Average assets 40,000 Total liabilities July 05, 2019. 5000 A) Funds flow in a transaction between current assets and fixed assets. this is typically a current asset . None of the answers listed are false The company’s quick ratio (acid-test) must be more than 25 The company has 25 times the number of current assets as it does current liabilities The company’s short-term […] current assets include cash and cash equivalents, accounts receivable, marketable securities, prepaid expenses, debtors etc. Inventories B. Creditors are interested in the proportion of current assets to current liabilities, since it indicates the short-term liquidity of an entity. ADVERTISEMENTS: Let us make an in-depth study of the non-current and current assets and liabilities. 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