Which of the following is classified as a current asset?

Cash and cash equivalents are classified as current assets because they are highly liquid resources that a company can readily use to meet its short-term obligations. Current assets are assets that are expected to be converted into cash, sold, or consumed within one year or during a company's operating cycle, whichever is longer. Cash and cash equivalents serve this purpose perfectly since they are already in liquid form and can be utilized immediately to pay off liabilities or invest in further opportunities.

In the context of financial accounting, the distinction between current and long-term assets is fundamental for assessing a company’s liquidity and operational efficiency. By having cash readily available, a business can handle day-to-day expenses, manage unforeseen expenses, and take advantage of investment opportunities without needing to secure financing or liquidate other assets that may take longer to convert into cash.