Which item is not a current asset?

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Multiple Choice

Which item is not a current asset?

Explanation:
Current assets are resources a business expects to convert to cash or use up within one year or the operating cycle. Cash is already cash, accounts receivable will be collected in a short period, and inventory will be sold to generate cash within that short timeframe. Buildings, however, are long-term assets used in operations for many years. They’re not typically converted to cash within a year and are depreciated over their useful life, so they are classified as non-current (fixed) assets. This is why buildings are not a current asset.

Current assets are resources a business expects to convert to cash or use up within one year or the operating cycle. Cash is already cash, accounts receivable will be collected in a short period, and inventory will be sold to generate cash within that short timeframe. Buildings, however, are long-term assets used in operations for many years. They’re not typically converted to cash within a year and are depreciated over their useful life, so they are classified as non-current (fixed) assets. This is why buildings are not a current asset.

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