An example of a current asset is

• A. accounts receivable and inventories
• B. land
• C. fixed assets
• D. long-term investments

Answer: (A)

Current assets are resources you expect to convert to cash or use up within one year (or the operating cycle). Accounts receivable are amounts customers owe you and are typically collected soon, while inventories are goods you plan to sell or use in production that will be turned into cash within that same short period. These fit the current asset category. Land, fixed assets, and long-term investments are long-term assets because they aren’t expected to be converted into cash within a year. So accounts receivable and inventories are the example of a current asset.