ACCA Applied Knowledge · Financial Accounting · Statement of financial position
Which of the following is correctly classified as a current asset of a retailer in its statement of financial position?
Goods purchased for resale are current assets because they are inventory expected to be sold within the normal operating cycle. The warehouse and delivery van are property, plant and equipment and the patent is intangible, so all three are non-current assets.
- AA freehold warehouse used for storing goods
- BGoods purchased for resaleCorrect
- CA delivery van used in the business
- DA patent held for five years
Explanation
Goods held for resale are inventory, expected to be sold in the normal operating cycle, so they are current. The warehouse and van are property, plant and equipment, and the patent is an intangible asset; all are non-current as they are held for continuing use.
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