An item that may be converted to cash within one year or one operating cycle of the firm is classified as a:
A) current liability.
B) long-term asset.
C) current asset.
D) long-term liability.

Question

Quizplus · Accepted Answer

A current asset is an item that is expected to be converted into cash within one year or one operating cycle of the firm. Examples of current assets include cash, accounts receivable, and inventory. Current liabilities, long-term assets, and long-term liabilities are not expected to be converted into cash within the same timeframe as current assets.

An Item That May Be Converted to Cash Within One