Future Business Leaders of America (FBLA) Agribusiness Practice Test

Which term refers to assets that are used or sold within a year?

1. Current asset

2. Liquid asset

3. Fixed asset

4. Intangible asset

The correct answer is: Current asset

The term that refers to assets that are used or sold within a year is "current asset." Current assets are essential components of a company's balance sheet and typically include cash, inventory, accounts receivable, and any other assets that are expected to be converted into cash or used up within a single operating cycle, generally one year. This classification helps businesses manage their short-term financial health and liquidity, making it easier to assess the company's ability to meet its short-term obligations. In contrast, other asset types like liquid assets can refer to cash or assets that can quickly be converted into cash, but they do not specifically denote the one-year time frame. Fixed assets, on the other hand, are long-term in nature, such as property and equipment, while intangible assets represent non-physical entities like patents and trademarks, which also do not fall into the one-year category. Thus, the designation of current asset accurately encompasses the criteria defined by the question.