Question

Identify each of the following as (a) a current asset or (b) property, plant, and equipment:

1. accounts receivable
2. building
3. cash
4. land
5. prepaid insurance
6. supplies

Answer 1

1. Accounts receivable - current asset, 2. Building - property, plant, and equipment, 3. Cash - current asset, 4. Land - property, plant, and equipment, 5. Prepaid insurance - current asset, 6. Supplies - current asset

Step-by-step explanation:

1. Accounts receivable - a current asset, as it represents the amount owed to a company by its customers for goods or services already provided.

2. Building - property, plant, and equipment, as it is a physical asset used in the operations of a business.

3. Cash - a current asset, as it represents the amount of money a company currently has on hand.

4. Land - property, plant, and equipment, as it is a physical asset owned by a company.

5. Prepaid insurance - a current asset, as it represents the cost of insurance coverage that has been paid for in advance.

6. Supplies - a current asset, as they are items used in the day-to-day operations of a business.