Current Asset

Business, Legal & Accounting Glossary

Definition: Current Asset


Quick Summary of Current Asset


An asset that is expected to be converted into cash within the trading cycle.



Full Definition of Current Asset


In accounting, a current asset is an asset on the balance sheet which is expected to be sold or otherwise used up in the near future, usually within one year, or one business cycle – whichever is longer. Typical current assets include cash, cash equivalents, accounts receivable, inventory, the portion of prepaid accounts which will be used within a year, and short-term investments.

On the balance sheet, assets will typically be classified into current assets and long-term assets.

The current ratio is calculated by dividing total current assets by total current liabilities. It is frequently used as an indicator of a company’s liquidity, its ability to meet short-term obligations.


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Current Asset. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. October 30, 2020 https://payrollheaven.com/define/current-asset/.
Chicago Manual of Style (CMS):
Current Asset. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/current-asset/ (accessed: October 30, 2020).
American Psychological Association (APA):
Current Asset. PayrollHeaven.com. Retrieved October 30, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/current-asset/

Definition Sources


Definitions for Current Asset are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 19th April, 2020 | 25 Views.