A current asset is
A) an asset that will be used in the operating activities of a business.
B) an asset generated by the operations of a business within the past year.
C) an asset that is expected to be used or converted to cash within one year or the operating cycle, whichever is longer.
D) a miscellaneous asset that is small in dollar amount.

Question

Quizplus · Accepted Answer

A current asset is defined as an asset that is expected to be used or converted to cash within one year or the operating cycle, whichever is longer. This includes assets such as cash, accounts receivable, and inventory, which are all expected to be either used or converted to cash within the next year or operating cycle. Therefore, option C is the best choice as it accurately defines a current asset. Options A, B, and D do not fully encompass the definition of a current asset.

A Current Asset Is