Assets expected to be converted to cash within a year are classified as?

Assets that are expected to be converted to cash within a year are classified as current assets. This classification is crucial in financial reporting and analysis because it reflects the liquidity of a business. Current assets typically include cash, accounts receivable, inventory, and other resources that can be quickly liquidated or utilized within the operating cycle of a company, which usually spans one year.

Understanding this category is vital for stakeholders who assess a company's short-term financial health, as having a robust pipeline of current assets indicates that the company is well-positioned to meet its short-term obligations and operational needs.

In contrast, fixed assets refer to long-term tangible assets that are not readily converted to cash, such as buildings and machinery, and other asset classifications do not pertain to the liquidity requirement defined by current assets. Thus, identifying these classifications helps in developing a comprehensive view of a company's financial position.