What does the term 'marketable securities' generally refer to in accounting?

The term 'marketable securities' in accounting typically refers to short-term assets that are expected to be converted into cash within a year. These securities are usually investments in stocks, bonds, or other financial instruments that are actively traded on public exchanges. The liquidity, or ease of converting these securities to cash, is a defining characteristic, making them an important aspect of a company's working capital management.

Marketable securities are recorded on the balance sheet as current assets because they provide a quick source of funds for the business, allowing for better financial flexibility. This is crucial for businesses that may have immediate cash needs or are looking to respond quickly to market changes.

Other types of assets mentioned in the options have different characteristics. Long-term investments are typically held for more than a year and are not considered marketable securities. Intangible assets refer to non-physical items such as patents or trademarks, while physical assets relate to tangible items like machinery or real estate. Thus, the classification of marketable securities as short-term assets aligns with their nature of being readily convertible to cash within a short timeframe.