Current assets include all of the following EXCEPT

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Prepare for the AAMI Small Business Management Test with flashcards and multiple choice questions; each question comes with hints and explanations. Get exam ready!

Multiple Choice

Current assets include all of the following EXCEPT

Explanation:
Current assets are resources a business expects to convert into cash or use up within one year. Cash is obviously a current asset, as is accounts receivable (money owed by customers) and inventory (goods held for sale). The item that represents what the company owes to suppliers is a liability, not an asset, and it sits on the balance sheet as a current liability because it’s a short-term obligation. So, accounts payable does not belong in current assets.

Current assets are resources a business expects to convert into cash or use up within one year. Cash is obviously a current asset, as is accounts receivable (money owed by customers) and inventory (goods held for sale). The item that represents what the company owes to suppliers is a liability, not an asset, and it sits on the balance sheet as a current liability because it’s a short-term obligation. So, accounts payable does not belong in current assets.

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