Current assets are best described as:

Current assets refer to resources that a business expects to convert into cash or use up within one year or within the normal operating cycle, whichever is longer. This category typically includes cash, accounts receivable, inventory, and other assets that are expected to be liquidated quickly to support the company’s short-term financial activities.

The definition aligns perfectly with the description of items that can be converted into cash within one year, which supports effective cash flow management, a crucial aspect of running a business efficiently. Understanding current assets is fundamental for evaluating a company’s liquidity, financial health, and operational efficiency.

The other options mischaracterize current assets—items that cannot be converted into cash are considered non-current assets or illiquid assets. Fixed assets, those that are fixed over a longer term, include property, plant, and equipment, rather than current assets. Items that depreciate instantly do not accurately represent the nature of current assets, as depreciation primarily pertains to fixed assets and not to the classification of assets based on their liquidity or conversion to cash.