Define Current assets.

Define Current assets.

• A. Things that are kept for less than 12 months by a business
• B. Things that are kept for more than 12 months
• C. Assets that are intangible only
• D. Liabilities

Answer: (A)

Current assets are the short-term resources a business expects to convert into cash or use up within the next year or within its operating cycle. This includes items like cash, accounts receivable, and inventory—things the business plans to realize or consume soon. They’re kept for less than 12 months, which is why this description fits best. Items held longer than a year are non-current assets, while liabilities are not assets at all. Intangible assets aren’t defined by being current or non-current on their own, so they don’t define current assets.

Current assets are the short-term resources a business expects to convert into cash or use up within the next year or within its operating cycle. This includes items like cash, accounts receivable, and inventory—things the business plans to realize or consume soon. They’re kept for less than 12 months, which is why this description fits best. Items held longer than a year are non-current assets, while liabilities are not assets at all. Intangible assets aren’t defined by being current or non-current on their own, so they don’t define current assets.