Current assets are assets that the business plans to sell, consume, or convert to cash within 12 months or the operating cycle, if it is longer.

Question

Quizplus · Accepted Answer

This is the correct definition of current assets as per generally accepted accounting principles (GAAP). Current assets include cash, accounts receivable, inventory, and prepaid expenses, among others. They are expected to be used or converted into cash within one year or the operating cycle, whichever is longer.

Current Assets Are Assets That the Business Plans to Sell