Short-term assets are defined as what?

Short-term assets are defined as assets that are expected to be liquidated or converted into cash within one year or within the operating cycle of the business, whichever is longer. This definition aligns with the concept of liquidity, which indicates how quickly an asset can be transformed into cash to meet short-term obligations.

Selecting the option that indicates assets liquidated to pay for liabilities within one year accurately reflects this definition. Short-term assets typically include cash, accounts receivable, inventory, and other assets that are expected to provide economic benefits in the near term. These assets are essential for a business to manage its short-term financial needs and ensure operational continuity.

The other choices do not fit the definition of short-term assets effectively. Investments expected to deliver long-term returns do not meet the criteria, as they focus on extended timeframes rather than immediate liquidity. Investing in stocks could refer to both short-term and long-term positions depending on the intent of the investment, making it not specifically applicable here. Intangible assets, while valuable, typically do not convert to cash quickly and often have longer useful lives, placing them outside the realm of short-term assets.