Explain current assets with an example.

Current Assets — Current assets are those assets which can be converted into cash within one year. Current assets are of two types:

1. Liquid assets — Cash in hand, cash at bank, bills receivable and short-term investments.
2. Floating assets — Stock-in-trade and sundry debtors.

Example: Stock-in-trade, sundry debtors, bills receivable, cash in hand and cash at bank are typical current assets. For instance, the stock of goods in a club's canteen which can be sold within a few months is a current asset.