Question

In: Accounting

Which of the following types of business would normally have the longest operating cycle? A. A...

Which of the following types of business would normally have the longest operating cycle?

A.

A car manufacturer
B.

A seller of resort property
C.

A car dealer
D.

A record store
E.

A grocery store

  1. Which of the following would not be classified as a current asset?

    A.

    Investments
    B.

    Marketable securities
    C.

    Cash
    D.

    Inventories
    E.

    Receivables

  1. Which of the following accounts would not be classified as a current asset?

    A.

    Cash and equivalents
    B.

    Cash
    C.

    Cash and certificates of deposit
    D.

    Time deposit
    E.

    Cash restricted for retirement of bonds

Solutions

Expert Solution

(1)

OPTION B: A seller of resort property

EXPLANATION:

The operating cycle for a seller of resort property is the longest because it takes the maximum time to sell the property strating right from finding a buyer to completion of legal registration process.

(2)

OPTION A: investments

EXPLANATION:

investments are not current asset because they are held in business for more than 12 months period

(3)

OPTION E: cash restricted for retirement of bonds

EXPLANATION:

cash restricted for retirement of bonds are not current asset because they are held in business for more than 12 months period and are not used for current business purposes

ekkarill92 answered 2 years ago
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