Which of the following is considered a current asset?

• A. Buildings
• B. Cash
• C. Equipment
• D. Land

Answer: (B)

The inclusion of cash as a current asset is based on its liquidity and availability for use in the short term. Current assets are defined as those assets that a company expects to convert into cash or use up within one year or within its operating cycle, whichever is longer. Cash is the most liquid of all assets, meaning it can be readily utilized to meet immediate financial obligations, such as paying bills or purchasing inventory.

In contrast, buildings, equipment, and land are classified as non-current or fixed assets. These assets are typically held for long-term use in business operations and are not intended to be converted into cash or consumed in the near term. Buildings and equipment usually depreciate in value over time, and land, while valuable, is also considered a long-term investment. Therefore, cash stands out as the only option that aligns with the definition of current assets due to its immediate availability and ability to meet short-term financial obligations.