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 statement of ﬁnancial position.
E)the market value of all items currently owned by the ﬁrm.

Question

Quizplus · Accepted Answer

A current asset is an item currently owned by the firm that is expected to be converted into cash within the next 12 months. This includes items such as cash, accounts receivable, and inventory. Options A, B, D, and E do not fully capture the definition of a current asset.

A Current Asset Is