A current asset is:
A)the last asset purchased by a business.
B)an asset which is currently being used to produce a product or service.
C)usually found as a separate classification in the income statement.
D)expected to be converted to cash or used in the business within a relatively short period of time.

Question

Quizplus · Accepted Answer

A current asset is an asset that is expected to be converted to cash or used in the business within a relatively short period of time, typically one year or less. Examples of current assets include cash, accounts receivable, inventory, and prepaid expenses. The other choices are incorrect because the last asset purchased by a business and an asset currently being used to produce a product or service could be long-term assets, and current assets are usually found as a separate classification on the balance sheet rather than the income statement.

A Current Asset Is