A current asset is
A)the last asset purchased by a business.
B)an asset which is not currently being used to produce a product or service.
C)usually found as a separate classification in the income statement.
D)expected to be converted to cash or used in the business within a relatively short period of time.

Question

Quizplus · Accepted Answer

A current asset is an asset that is expected to be either converted into cash or used up within a year or operating cycle, whichever is longer. This means it is a short-term asset, as opposed to a long-term or fixed asset. Examples of current assets include cash, accounts receivable, inventory, and prepaid expenses. Therefore, option D is the best choice as it correctly defines a current asset.

A Current Asset Is