What classification of assets includes cash and accounts receivable?

Current assets are classified as assets that are expected to be converted into cash or consumed within one year or within the operating cycle of the business, whichever is longer. Cash is the most liquid form of asset, readily available for use in day-to-day transactions. Accounts receivable represents amounts owed to the company by customers for goods or services provided on credit and are also expected to be collected within a short time frame, typically within a year.

The classification of cash and accounts receivable as current assets reflects their role in a company's liquidity and operational cycle, as these are essential for covering immediate obligations and ongoing operational needs. Understanding this classification helps in assessing a company's financial health and its ability to meet short-term liabilities.