current assets

1. A balance sheet account that represents the value of all assets that are reasonably expected to be converted into cash within one year in the normal course of business. Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash.

2. In personal finance, current assets are all assets that a person can readily convert to cash to pay outstanding debts and cover liabilities without having to sell fixed assets.

In the United Kingdom, current assets are also known as "current accounts".

Investopedia Says:
1. Current assets are important to businesses because they are the assets that are used to fund day-to-day operations and pay ongoing expenses. Depending on the nature of the business, current assets can range from barrels of crude oil, to baked goods, to foreign currency.

2. In personal finance, current assets include cash on hand and in the bank, and marketable securities that are not tied up in long-term investments. In other words, current assets are anything of value that is highly liquid.

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Cash, accounts receivable, inventory, and other assets that are likely to be converted into cash, sold, exchanged, or expensed in the normal course of business, usually within a year.

Item having a life of one year or less, or the normal Operating Cycle of the business, whichever is greater. For example, if a construction company's operating cycle is three years because it is engaged in long-term construction activities, it would show as current assets items having up to a three-year life. However, in almost all cases, the one-year cutoff is used. Examples of current assets are cash, marketable securities, inventory, and prepaid expenses.

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