Definition

Current assets

Current assets are that a company expects to convert to cash or use up within one year. For most businesses the cutoff for classification as current assets is one year from the balance sheet date. For example, accounts receivable are current assets because the company will collect them and covert them to cash within one year. A supply is a current asset because the company expects to use it up in operations within one year.


Current assets mean cash plus items that can or will be converted to cash and used within one year; the most liquid of a firm’s assets.

Share it:  Cite

More from this Section

  • Decentralization
    Decentralization means that the control of operations is delegated to many managers throughout ...
  • Accounting
    Accounting is the financial information system that identifies, records, and communicates ...
  • Materials price variance
    Materials price variance is the difference between the actual quantity times the actual ...
  • The Benefit of Budgeting
    The primary benefit of budgeting are: It requires all levels of management to a plan ...
  • Post-closing trial balance
    The post-closing trial balance is a list of permanent accounts and their balances after ...