6.

The operating cycle concept

Permits some assets to be classified as current even though more than one year removed
from becoming cash
Causes the distinction between current and noncurrent to depend on cash realization within one
year
Has become obsolete
Affects the income statement only
7. When classifying assets as current and non-current
Assets are classified as current if reasonably expected to be realized in cash or consumed
during the normal operating cycle.
Current assets must reflect realizable cash value
Prepayments are included in other assets
Current assets are determined by the seasonal nature
8. the term net assets represents
Total assets less total liabilities
9. Treasury shares should be reported as
Reduction of shareholder’s equity
10. The term deficit refers to
A debit balance in retained earnings