Question

What is the term for a company's cash and other resources that are expected to turn to cash within one year of the balance sheet date or operating cycle?

Option 1: Long-term assets
Option 2: Current assets
Option 3: Fixed assets
Option 4: Intangible assets

Answer 1

The term for the company's resources expected to convert to cash within a year or one operating cycle is Option 2: 'current assets'. These include cash, inventory, and accounts receivable, vital for handling short-term liabilities.

Step-by-step explanation:

The term for a company's cash and other resources that are expected to turn to cash within one year of the balance sheet date or operating cycle is Option 2: current assets.

This category on a balance sheet includes items such as cash, inventory, and accounts receivable that are expected to be converted into cash, sold, or consumed within a single year or one operating cycle, whichever is longer.

Current assets are essential for the day-to-day operations of a business as they represent the value of all assets that can readily be turned into cash to cover short-term liabilities.