Which type of asset is expected to be sold or used within one year as part of standard business operations?

Current assets are defined as assets that are expected to be converted into cash, sold, or consumed within one year as part of standard business operations. This includes cash and cash equivalents, accounts receivable, inventory, and other liquid assets that are integral to the daily functioning of a business. The key characteristic of current assets is their short-term nature, which distinguishes them from non-current assets, which are intended for long-term use and are not expected to be liquidated within a year.

In the context of business operations, current assets are crucial because they provide the liquidity needed to meet short-term financial obligations and facilitate daily operational activities. The management of current assets is a vital component of working capital management, aiming to ensure that a company can continue its operations without facing liquidity issues.

Non-current assets, on the other hand, are typically long-term investments, such as property, plant, and equipment, which are not intended to be sold or used up within one year. Physical assets refer to tangible items like equipment and buildings, while intangible assets consist of non-physical resources like patents and trademarks. However, neither physical nor intangible assets necessarily align with the one-year timeframe applicable to current assets.