Quick assets are defined as which of the following?

• A. Non-current assets
• B. Long-term investments
• C. Current assets that can be converted to cash within 90 days or in the short-term
• D. Inventory

Answer: (C)

This question tests liquidity and what counts as quick assets. Quick assets are the most liquid current assets—those that can be readily turned into cash to meet short-term obligations. They typically include cash, marketable securities, and accounts receivable, while inventory is excluded because it may not be converted to cash quickly or reliably.

The option describing current assets that can be converted to cash within 90 days or in the short term aligns with this idea, since it focuses on assets that can be converted to cash in a short horizon.

Non-current assets aren’t part of this liquidity measure, long-term investments aren’t readily convertible in the near term, and inventory is excluded from quick assets due to potential delays in sale.