Which statement is NOT typically a current asset?

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Multiple Choice

Which statement is NOT typically a current asset?

Current assets are resources a business expects to convert into cash or use up within one year or the operating cycle. Merchandise inventory is held for sale and typically sold within the year, so it’s a current asset. Short-term investments are securities the company plans to cash in within a year, so they’re current. Prepaid expenses represent payments made in advance for goods or services to be used within the year, making them current as well. Land, however, is a long-term asset used in operations over many years and is not expected to be converted to cash within the near term, so it is not a current asset.

Current assets are resources a business expects to convert into cash or use up within one year or the operating cycle. Merchandise inventory is held for sale and typically sold within the year, so it’s a current asset. Short-term investments are securities the company plans to cash in within a year, so they’re current. Prepaid expenses represent payments made in advance for goods or services to be used within the year, making them current as well. Land, however, is a long-term asset used in operations over many years and is not expected to be converted to cash within the near term, so it is not a current asset.

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