Which of the following would be classified as current (short-term) assets?

Which of the following would be classified as current (short-term) assets?

• A. Patents and copyrights
• B. Accounts receivable
• C. Property, plant, and equipment
• D. Domain name and trademark

Answer: (B)

Current assets are resources a company expects to convert to cash or use up within one year (or its operating cycle). Accounts receivable represents money owed by customers from credit sales and is normally collected in the short term, so it fits squarely as a current asset. The other items are typically long-term: patents and copyrights are intangible assets with finite life and amortization; domain names and trademarks are also intangible assets; and property, plant, and equipment are tangible assets used in operations over many years. Hence, accounts receivable is the appropriate classification for a current asset.

Current assets are resources a company expects to convert to cash or use up within one year (or its operating cycle). Accounts receivable represents money owed by customers from credit sales and is normally collected in the short term, so it fits squarely as a current asset. The other items are typically long-term: patents and copyrights are intangible assets with finite life and amortization; domain names and trademarks are also intangible assets; and property, plant, and equipment are tangible assets used in operations over many years. Hence, accounts receivable is the appropriate classification for a current asset.