Question

Zee Ltd. has an Operating Cycle Period of 20 months. A trade receivable is realisable in 20 months, it will be shown under ______.

Options

• Current Assets.

• Non-current Assets.

• Cannot be determined.

• None of these.

Answer 1

Zee Ltd. has an Operating Cycle Period of 20 months. A trade receivable is realisable in 20 months, it will be shown under Current Assets.

Explanation:

An asset is classified as a Current Asset if it is expected to be realized or sold within the company's normal operating cycle, even if that cycle is longer than 12 months. Since Zee Ltd.'s operating cycle is 20 months and the trade receivable will be realized in exactly 20 months, it fits perfectly within the operational window and is presented as a Current Asset.