Asked in Investing and Financial MarketsCommercial InsuranceBusiness Accounting and Bookkeeping
Is inventory considered a quick asset?
March 28, 2012 3:03AM
No. Quick assets must be one step or less to convert to cash. Quick assets are cash (doesn't need to be converted), A/R and temporary investments (cash just needs to be collected).
Inventory is considered a current asset, but not a quick asset, because it requires two steps to convert to cash. It must be sold, and then the cash must be collected.