Which of the following are classified as current assets?

Current assets are defined as assets that are expected to be converted into cash or used up within one year or within the operating cycle of the business. Cash is the most liquid asset and is readily available for immediate use. Merchandise on hand, which includes inventory, is also classified as a current asset since it is expected to be sold within the operating cycle, generating cash in the short term.

In contrast, land and buildings are considered long-term assets or fixed assets because they are not intended for immediate sale and usually have a longer useful life. Accounts receivable over one year falls into the category of long-term assets, as it represents money owed to the business that won't be received within the current operating cycle. Investment properties, like land or buildings held for rental income or appreciation, are also classified as non-current assets due to their long-term nature. Hence, the correct choice of cash and merchandise on hand accurately reflects the definition of current assets.