Current assets and current liabilities both reside on the balance sheet Both have the same characteristic in that they're both expected to have a life of less than one year, hence they're given the name current Let's look into current assets first Well first of all, as it's an asset, that means it will provide future benefit to a business Examples include cash and cash equivalents, short term investments, accounts receivable prepaid items and inventory All of them are assets that you own and will give you future benefit If you've prepaid for something, that means you're gonna get that something in the future Accounts receivable means you're going to receive something from your customers Let's now look at current liabilities Because it's a liability, that means it's a future obligation of the business Examples include short term debt, accounts payable, accrued expenses, dividends payable and taxes payable