Which of the following would be considered a current asset?

Current assets are defined as assets that are expected to be converted into cash or used up within one year or one operating cycle, whichever is longer. Inventory that is anticipated to be sold within the next year fits this definition perfectly, as it represents goods that are actively being prepared or are ready for sale in the short term.

In contrast, real estate owned by the business is classified as a long-term asset because it is not expected to be liquidated within a year. Machinery and equipment for production are also considered long-term assets, as they are used for an extended period in the operations of the business and do not convert to cash quickly. Finally, patents held by the company are intangible assets and typically have a longer lifespan as well, usually valued over multiple years, which further excludes them from being classified as current assets.