Question

The characteristics of a current asset would not include in proprietor_____________.

• A. Liquidity
• B. Not bought for resale
• C. Likely to change before the next accounting period is over
• D. Use a part of the firm's trading operation

Answer 1

Answer: (B)

Not bought for resale

An item is classified as current if it is involved in entity’s operating cycle or is expected to be realised/settled within twelve months or, if it is held primarily for trading or, is cash and cash equivalent or, if entity does not have an unconditional rights to defer settlement of liability for at least 12 months after the reporting period, Other assets and liabilities are non-current. Hence current assets will also have characteristic of resale of items as it involves inventories also which are bought solely for the purpose of resale.