A current asset is:
A) an item currently owned by the firm.
B) an item that the firm expects to own within the next year.
C) an item currently owned by the firm that will convert to cash within the next 12 months.
D) the amount of cash on hand the firm currently shows on its balance sheet.
E) the market value of all items currently owned by the firm.

Question

Quizplus · Accepted Answer

A current asset is an item that is currently owned by the firm and is expected to convert into cash within the next 12 months. This can include items such as cash, accounts receivable, and inventory, among others. Options A, B, D, and E are not completely accurate as they do not convey the requirement for the item to be converted to cash within the coming year.

A Current Asset Is