Question

Current assets include only those assets which are expected to be realised within:

• A. 3 months
• B. 6 months
• C. 1 year
• D. 2 years

Hint:

Current assets = assets realisable within 12 months (or business cycle, whichever is longer).

Answer 1

The Correct Option is C

Step 1: Definition of current assets.
As per accounting standards, current assets are those which are expected to be realised, sold, or consumed in the normal course of business within one year or within the operating cycle (whichever is longer).
Step 2: Examples.
Cash, debtors, bills receivable, stock, prepaid expenses, etc., are included in current assets.
Step 3: Eliminate wrong options.
- 3 months and 6 months: Too short, not general definition.
- 2 years: Too long.
Step 4: Conclude.
Hence, current assets are those which are expected to be realised within one year.
Final Answer: \[ \boxed{1\; \text{year}} \]