Which of the following best describes current assets?

• A. Items that can be converted into cash within a year
• B. Items that are long-term
• C. Investments in land
• D. Intangible assets

Answer: (A)

Current assets are resources a business expects to turn into cash or use up within the short term, typically within one year or the operating cycle. This includes items like cash, accounts receivable, inventory, and prepaid expenses that will be converted or consumed soon. That’s why the best description is items that can be converted into cash within a year. The other options describe long-term or non-current assets—things like land investments and most intangible assets—that are not expected to be converted to cash in the near term.