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Astha
AsthaLeader
In: 1. Financial Accounting > Miscellaneous

What are examples of current assets?

What are examples of current assets?
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    1. GautamSaxena Curious .
      2022-08-18T19:31:02+00:00Added an answer on August 18, 2022 at 7:31 pm
      This answer was edited.

      Current Assets & Examples

      Current Assets are those assets that are bought by the company for a short duration and are expected to be converted into cash, consumed, or written off within one accounting year. They are also called short-term assets.

      These short-term assets are typically called current assets by the accountants and have no long-term future in the business. Current assets may be held by a company for a duration of a complete accounting year, 12 months, or maybe less. A major reason for the conversion of current assets into cash within a very short amount of time is to pay off the current liabilities.

      Examples

      Some of the major examples of current assets are – cash in hand, cash at the bank, bills receivables, sundry debtors, prepaid expenses, stock or inventory, other liquid assets, etc.

      • All of these assets are converted into cash within one accounting year.
      • Liquid assets are a part of current assets. Although they are easier to be converted into cash than current assets.
      • Current assets (along with current liabilities) help in the calculation of the current ratio. And they’re also referred to as circulating/floating assets.
      • Current assets are shown on the balance sheet (on the asset side) under the heading, current assets.

      Current assets on the balance sheet

      Balance Sheet (for the year…)

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