Final answer:
Current assets are resources expected to be converted into cash within one year, as listed on a company's balance sheet.
Step-by-step explanation:
Current assets are resources that a firm expects to sell, collect, or use within one year. They are listed on a company's balance sheet, an essential accounting tool that provides a snapshot of a company's financial health by detailing assets and liabilities. Common examples of current assets include cash, marketable securities, accounts receivable, inventory, and other liquid assets that can easily be converted into cash within a short period.
Specifically, the correct answer to the student's question is option 1) Resources that are expected to be sold, collected, or used within one year. This fits within the broader definitions of liquidity in financial contexts, referring to how quickly and easily an asset can be used to generate cash for meeting short-term obligations or purchasing goods and services.