Which term describes the category that includes cash and other assets expected to be used within one year?

Which term describes the category that includes cash and other assets expected to be used within one year?

• A. Assets
• B. Fixed assets
• C. current assets
• D. Liabilities

Answer: (C)

Understanding liquidity and asset classification: current assets are cash and other assets expected to be used up or converted into cash within one year. This includes items like cash, accounts receivable, and inventory, and even short-term investments that you plan to sell within a year. Fixed assets, by contrast, are long-term resources such as buildings and equipment used over many years. Liabilities are obligations the company owes, not assets. Since the description points to cash and assets planned to be used within one year, the correct category is current assets.

Understanding liquidity and asset classification: current assets are cash and other assets expected to be used up or converted into cash within one year. This includes items like cash, accounts receivable, and inventory, and even short-term investments that you plan to sell within a year. Fixed assets, by contrast, are long-term resources such as buildings and equipment used over many years. Liabilities are obligations the company owes, not assets. Since the description points to cash and assets planned to be used within one year, the correct category is current assets.