Examples of current assets include?

Current assets are assets that are expected to be converted into cash or used up within one year or within one business cycle, whichever is longer. Inventory and accounts receivable fit this definition perfectly. Inventory represents goods that are ready for sale, while accounts receivable consists of money owed to the business by its customers for goods or services already delivered. Both of these assets are critical in assessing a company's liquidity and operational efficiency because they can quickly convert to cash to meet short-term obligations.

In contrast, long-term investments, real estate holdings, and intangible assets do not qualify as current assets because they are not expected to convert to cash or be consumed within that short time frame. Long-term investments involve securities that the company intends to hold for more than a year, real estate holdings are generally tied up for extended periods, and intangible assets represent non-physical items like patents, trademarks, or goodwill, which also do not have a direct quick cash conversion. Hence, inventory and accounts receivable are the most representative examples of current assets.