The term ____ describes assets that can be quickly converted into cash or consumed in one year or less.
A) expenses
B) overhead costs
C) current assets
D) acid-test assets
E) fixed assets

Question

Quizplus · Accepted Answer

Current assets are assets that can be easily converted into cash or consumed within one year or less. Examples include cash, accounts receivable, inventory, and prepaid expenses. Expenses (A) are costs incurred to generate revenue, and do not relate to assets. Overhead costs (B) are indirect costs associated with running a business, such as utilities and rent. Acid-test assets (D) are a subset of current assets that excludes inventory, as inventory may not be easily convertible to cash. Fixed assets (E) are long-term assets like equipment and property that are not easily converted to cash.

The Term ____ Describes Assets That Can Be Quickly Converted