Current assets are benefits the company expects to receive within the next 12-month period.
For example, suppose a company sells a product to a customer with payment terms 2/10 net 30. The company did not receive cash at the time of sale, so it must record an accounts receivable for the amount due. Given the invoice requires payment within 30 days, the accounts receivable amount is a current asset.
Current assets may include, but are not limited to, some of the following assets:
- Cash
- Cash Equivalents
- Accounts Receivable
- Deposits
- Prepaid Expenses
- Inventory
The company’s current assets are reported first in the asset section on the balance sheet. After the current assets, the company reports property, plant & equipment (PPE), and other noncurrent assets.