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WAEC Financial Accounting 2024 Question 20

Question 20

Final Accounts of a Sole Trader

An item is classified as a current asset if it is

  1. A.purchased for long-term use.
  2. B.expected to be realized within the balance sheet date.
  3. C.fictitious in nature.
  4. D.neither cash nor cash equivalent.
Show the answer and explanation

Answer: B (expected to be realized within the balance sheet date.)

Explanation

Current assets are cash or items expected to turn into cash within the coming year.