A is corrent. A current asset is cash and an other asset that is expected to be converted into cash, sold, or consumed either in 1 year or in the operating cycle, whichever is longer. Since the company only has a 6-month operating cycle, the current portion of the prepaid insurance costs is 1 year or 12 months.
B is incorrect because a current asset is cash and an other asset that is expected to be converted into cash sold, or consumed either in 1 year or in the operating cycle, whichever is longer. Since the company only has a 6-month operating cycle, the current porition of the prepaid insurance costs is 1 year or 12 months.
C is incorrect because a current asset is cash and an other asset that is expected to be converted into cash sold, or consumed either in 1 year or in the operating cycle, whichever is longer. Since the company only has a 6-month operating cycle, the current porition of the prepaid insurance costs is 1 year or 12 months.
D is incorrect because a current asset is cash and an other asset that is expected to be converted into cash sold, or consumed either in 1 year or in the operating cycle, whichever is longer. Since the company only has a 6-month operating cycle, the current porition of the prepaid insurance costs is 1 year or 12 months.
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