Which term describes assets that can be quickly converted into cash?

• A. Current (short-term) assets
• B. Long-term assets
• C. Intangible assets
• D. Fixed assets

Answer: (A)

The idea being tested is liquidity—the ability to turn assets into cash quickly. Current (short-term) assets are those expected to be converted to cash within one year or the operating cycle, whichever is longer. This category includes cash, accounts receivable, and inventory that can be sold relatively soon, making them the most liquid on the balance sheet. In contrast, long-term assets are held for more than a year (like property or equipment), intangible assets are non-physical and may be harder to monetize quickly, and fixed assets are long-lived tangible assets used in operations. So the term for assets that can be quickly converted into cash is current (short-term) assets.