Is Cash a Current Asset?

Written by True Tamplin, BSc, CEPF®

Updated on January 02, 2023

Yes, cash is a current asset for accounting purposes. Current assets are any assets that can be converted into cash within a period of one year. This counts products that are sold for cash as well as resources that are consumed, used, or exhausted through regular business operations that are expected to provide a cash value return within a single year. Cash and cash equivalents are the most liquid of assets, making them more “current”than all other current assets. Cash of course requires no conversion and is spendable as is, once withdrawn from the bank or other place where it is held. Cash equivalents, such as certificates of deposit, are any type of liquid securities that are not in the form of cash currently, but that can be converted to cash instantly.

Is Cash a Current Asset FAQs

Is cash a current asset?

Yes, cash is a current asset for accounting purposes.

What is a current asset?

Current assets are any assets that can be converted into cash within a period of one year.

Why is cash considered a current asset?

Cash and cash equivalents are the most liquid of assets, making them more “current” than all other current assets.

Why is cash a recommended current asset?

Cash of course requires no conversion and is spendable as is, once withdrawn from the bank or other place where it is held.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.