Question

Current assets are those assets which get converted into cash

(a) within six months

(b) within one year

(c) between one year and three years

(d) between three and five years

Answer 1

(b) Current assets are those assets which can be converted into cash or can be used to pay off liabilities within a time span of 12 months, i.e. one year. Some of the examples of current assets are cash, cash equivalents, inventories, debtors, bills receivables, etc.