Cash plus items that are readily convertible to cash, such as accounts receivable, marketable securities, and inventories are classified as ________ on a firm's balance sheet.
A) other assets
B) intermediate term assets
C) temporary assets
D) current assets
E) fixed assets

Question

Quizplus · Accepted Answer

Cash and items that are readily convertible to cash, such as accounts receivable, marketable securities, and inventories are classified as current assets on a firm's balance sheet because they are expected to be converted into cash within one year or less. Other assets, intermediate term assets, and fixed assets have longer expected conversion periods. Temporary assets are not a recognized classification on a balance sheet.

Cash Plus Items That Are Readily Convertible to Cash, Such