What is current assets in accounting

Current assets are short-term resources a business owns that are expected to be converted into cash, sold, or consumed within one year or one operating cycle. They are essential for maintaining liquidity and funding daily operations. Common examples include:

• Cash and cash equivalents (bank balances, petty cash)
• Accounts receivable (money owed by customers)
• Inventory (raw materials and finished goods)
• Marketable securities (short-term investments)
• Prepaid expenses (advance payments for insurance or rent)

Efficient management of these assets ensures a company can meet its short-term financial obligations.