Question

Identify which of the accounts below would be classified as a current asset. Check all that apply. Provide information on the classification of accounts as current assets in accounting.

Answer 1

Current assets on a bank's balance sheet include cash, loans made by the bank, and U.S. Government Securities. These assets are easily converted into cash or used up within one year.

Step-by-step explanation:

Current assets are those that can be easily converted into cash or used up within one year. Examples of current assets on a bank's balance sheet include cash held in the bank's vaults, money owed to the bank by other parties such as loans made by the bank, and U.S. Government Securities like U.S. treasury bonds purchased by the bank.

Other examples of current assets may include accounts receivable, inventory, and prepaid expenses. Current assets are essential for a bank's day-to-day classified as such because they are expected to be converted into cash or used within a relatively short period of time.