Current Assets

Current Assets are generally defined as cash and other assets that can be converted into cash within one year or one operating cycle, whichever is longer.  As a rule, current assets can be turned into cash, and used to pay a current liability within one year.

Current assets appear on the balance sheet, and the items included in current assets are usually listed in order of their liquidity.  The five major items that usually appear under current assets include: cash, marketable securities, accounts receivable, inventories, and prepaid items.