Meaning and Definition of Current Assets
Operating assets that are used in the business and which can be converted into cash during a short duration are called ‘Current Assets’. In other words, assets acquired through cash and easily convertible into cash during the normal course of business are termed as current assets. Current Assets are also known as floating or circulating assets. Current assets includes cash in hand, cash at bank, short-term marketable securities, short-term investments, bills receivables, sundry debtors, inventories, and prepaid expenses.
Current Asset is defined by various authors as -
Merriam Webster: Assets of a short-term nature that are readily convertible to cash.
Collins Dictionary: Current assets are assets which a company has which can convert it into cash within one year.
Accounting Dictionary: A current asset, also called a short-term asset, is a resource expected to be used to benefit a company within a year or the current accounting period.