Which of the following is a current asset?

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Study for the AAT Level 2 Introduction to Bookkeeping Test. Use flashcards and multiple choice questions with hints and explanations. Prepare effectively for your exam!

Multiple Choice

Which of the following is a current asset?

Explanation:
Current assets are resources the business expects to convert into cash within a year or the normal operating cycle. Stock fits this because it comprises goods held for sale that are typically sold soon, turning into cash when customers buy them. The delivery van is a non-current asset (a fixed asset used over many years). A bank loan is a liability, representing money the business owes. Accounts payable is also a liability, amounts owed to suppliers. So stock is the current asset in this list.

Current assets are resources the business expects to convert into cash within a year or the normal operating cycle. Stock fits this because it comprises goods held for sale that are typically sold soon, turning into cash when customers buy them. The delivery van is a non-current asset (a fixed asset used over many years). A bank loan is a liability, representing money the business owes. Accounts payable is also a liability, amounts owed to suppliers. So stock is the current asset in this list.

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