Question

The distinction between a current asset and other assets: Multiple Choice is based on the ability to determine the current fair value of the asset. is based on when the asset is expected to be converted to cash, or used to benefit the entity. is based on how long the asset has been owned. is based on amounts that will be paid to other entities within a year.

Answer 1

The key distinction between a current asset and other assets is based on when the asset is expected to be converted to cash or utilized to benefit the business within a year or an operating cycle.

Step-by-step explanation:

The distinction between a current asset and other assets lies in when the asset is expected to be converted to cash, or used to benefit the entity. Current assets include cash and other assets that are expected to be turned into cash, consumed, or expended within one year of the balance sheet date or the entity's operating cycle, whichever is longer. Non-current assets, on the other hand, are long-term investments, property, plant and equipment, and other assets that a business does not expect to convert to cash within the normal business cycle.

Answer 2

is based on when the asset is expected to be converted to cash, or used to benefit the entity.

Step-by-step explanation:

There are mainly three types of assets

1. The current asset is the asset that converted into cash within 12 months

2. The fixed asset is the asset that remains fixed like land, building

3 The intangible asset is the asset that cannot be seen or touched like intellectual property such as goodwill, patent

So here the distinction is to be made with respect to the convertibility to cash and the benefit provided to the entity