Question

If collection of an other receivable is expected beyond one year, it is classified as a

(A) noncurrent asset and reported under Other Receivables
(B) current asset and reported under Investments
(C) current asset and reported under Other Receivables
(D) noncurrent asset and reported under Investments

Answer 1

(D) non-current asset and reported under Investments

Step-by-step explanation:

The total assets comprise of current assets, fixed assets, and the intangible assets

The current assets include cash, stock, account receivable, etc

which is up to one year

Fixed assets include plant & machinery, land, equipment, furniture & fittings, etc.

And, the intangible assets include patents, copyrights, goodwill, etc.

The fixed assets and the intangible assets have life for more than one year like 5 to 6 years or even more.

In the given question, the collection is made for other receivable which is to be reported under investments and considered as a non-current asset