Question

question 11

non-current assets are used in businesses for a period greater than one month.

true
false

Explanation:

🆕 New Concept Discovered: Asset Classification
Distinguishing between current and long-term resources.

Step 1: Define Non-Current Assets

In accounting, assets are classified based on their expected useful life and liquidity:

• Current assets are cash and other resources expected to be converted to cash, sold, or consumed within one year (or one operating cycle, whichever is longer).
• Non-current assets (also known as long-term assets) are long-term investments, property, plant, equipment, and intangible assets that a business intends to hold and use to generate income for a period greater than one year (12 months), not one month.

Step 2: Evaluate the Statement

The statement claims: "Non-current assets are used in businesses for a period greater than one month."

While a period greater than one year is technically also greater than one month, the standard accounting threshold that defines a non-current asset is one year (12 months). Defining them by a "one-month" threshold is incorrect because assets held for 2 to 11 months are still classified as current assets, not non-current assets. Therefore, the statement is false.

Answer:

False