What are current assets?

Current assets are those that can be quickly converted into cash. This includes cash itself, as well as investments, accounts receivable, and inventory. Current assets are important components of your balance sheet and financial statements. Current assets are items that you expect to convert to cash within one year.

How are current assets presented on a balance sheet?

Current assets are expected to be consumed, sold, or converted into cash either in one year or in the operating cycle, whichever is longer. They are usually presented in order of liquidity on the balance sheet and include cash and cash equivalents, accounts receivables, inventory, prepaid, and other short-term assets.

What is a current assets account & why is it important?

Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets. The Current Assets account is important because it demonstrates a company's short-term liquidity and ability to pay its short-term obligations.