Which item is included in current assets?

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Multiple Choice

Which item is included in current assets?

Current assets are resources a company expects to convert into cash or use up within one year or the operating cycle. Inventory fits this definition because it consists of goods held for sale in the ordinary course of business and is typically sold within the near term, producing cash. In contrast, property, plant, and equipment are long-term assets used in operations over many years; intangible assets are also long-term and not readily converted to cash in the short term. Accrued expenses are liabilities, not assets. So the item that belongs in current assets is Inventory.

Current assets are resources a company expects to convert into cash or use up within one year or the operating cycle. Inventory fits this definition because it consists of goods held for sale in the ordinary course of business and is typically sold within the near term, producing cash. In contrast, property, plant, and equipment are long-term assets used in operations over many years; intangible assets are also long-term and not readily converted to cash in the short term. Accrued expenses are liabilities, not assets. So the item that belongs in current assets is Inventory.

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