What are current assets in accounting?

Answer 1

Everything you currently have in your possession that has a positive worth - e.g. buildings, bank accounts, inventory, etc.

(Not accounts receivables that have not yet been collected, possible returns on investments, etc.)

Answer 2

Current assets are cash and other assets expected to be converted to cash, sold, or consumed either in a year or in the operating cycle. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:

1. Cash - it is the most liquid asset, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, checks, bank drafts).

2. Short-term investments - include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).

3. Receivables - usually reported as net of allowance for uncollectible accounts.

4. Inventory - trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule.

5. Prepaid expenses - these are expenses paid in cash and recorded as assets before they are used or consumed (a common example is insurance).

Answer 3

Current assets are things that can be converted into cash quickly. For example, obviously cash is the first, short-term investments, prepaid expenses, and materials and supplies.

Answer 4

any asset expected to be converted to cash within 12 months