Which statement about current assets is true?

Which statement about current assets is true?

• A. Property, plant & equipment is a current asset
• B. Intangible assets are a current asset
• C. Inventory is a current asset
• D. Goodwill is a current asset

Answer: (C)

Current assets are resources a company expects to convert to cash or use up within one year (or the operating cycle, if it’s longer). Inventory fits this category because it will typically be sold in the normal course of business within that period, turning into cash or being consumed in production. Property, plant and equipment are long-term assets used over many years and aren’t expected to be converted to cash within the year. Intangible assets (like patents or licenses) and goodwill are also noncurrent, providing value over multiple periods rather than being liquidated in the near term. So, inventory is the true current asset among these options.

Current assets are resources a company expects to convert to cash or use up within one year (or the operating cycle, if it’s longer). Inventory fits this category because it will typically be sold in the normal course of business within that period, turning into cash or being consumed in production. Property, plant and equipment are long-term assets used over many years and aren’t expected to be converted to cash within the year. Intangible assets (like patents or licenses) and goodwill are also noncurrent, providing value over multiple periods rather than being liquidated in the near term. So, inventory is the true current asset among these options.