A current asset is
A) an expense, such as rent, that is paid before the upcoming period in which it is due.
B) a nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit.
C) an amount due from a customer who has purchased goods on credit.
D) an asset with long-term use or value, such as land, buildings, and equipment.
E) an asset that can or will be converted to cash within the following year.

Question

Quizplus · Accepted Answer

A current asset is an asset that is expected to be converted to cash or used up within the next 12 months. Examples of current assets include cash, marketable securities, accounts receivable, inventory, and prepaid expenses. Choice A is incorrect because it describes a prepaid expense, which is a current asset. Choice B describes an intangible asset, which may or may not be a current asset depending on its expected use. Choice C describes an accounts receivable, which is a current asset. Choice D describes a long-term asset, which is not a current asset.

A Current Asset Is