What are current assets?

Question

Accepted Answer

Current assets are liquid resources owned by businesses, including cash and cash equivalents, short-term investments, accounts receivable, inventory, and other resources, that can quickly be converted to cash.

Current assets (also called short-term assets) are assets a business uses, replaces, and/or converts to cash within a normal operating cycle (typically less than 12 months). It distinguishes them from long-term assets, those a business uses for more than a year.

Many assets can be considered current by different businesses throughout all industries. In general, most industries group their current assets into these sub-accounts; however, you might see others. Because current assets are easier to convert to cash than long-term assets, they are referred to as liquid assets.