Current assets are cash or assets that can easily be converted into cash. They are characterised by their easy availability and are expected to convert into cash or be consumed within the next twelve months. All other assets should be classified as non-current (or long-term) assets.

Some examples of current assets are:

Cash – Bank notes and coins held physically or available in the bank. ‘Profit’ is not a defined element as it is the difference between two elements.
Accounts receivable – Outstanding debts or amounts to be collected. A distinction and separation between clients or customers and other debts is usually made. A business could have ‘clients’ debts to the business due to services rendered or ‘customer’ debts to the business due to sales made.
Inventory – These are the merchandise or goods that an entity has available for sale in the ordinary course of business operations or to be consumed in the production of goods or services. Inventories include merchandise, raw materials, work in process and finished goods.

Even though prepaid expense is also an example of current asset, it is treated as expense (rather than capital/asset) here for small enterprises.

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adviser CONAMYPE
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