Troy Martinez
ACC/400
September 25, 2010
Debra Latimore
University of Phoenix
Comparing and contrasting current and noncurrent
What are current assets?
Current assets are also known as liquid assets. The most common of current assets can be found in the Accounts Receivables department. They can be found in the form of invoices. Current assets are any assets that can be turned into cash in less than a year. Other forms of current assets are things such as inventory, short-term investments, prepaids, and, of course, cash (Williams, Haka, & Bettner, 2005).
As a rule, companies view current assets as anything that can be converted into cash within …show more content…
an operating cycle. For most companies that is a year. Other companies have an operating cycle of more than a year, other less than a year. It is mostly dependent upon their operating cycle.
What are noncurrent assets?
Noncurrent assets are anything that is not a current asset. Things such as long-term investments, intangible assets, and fixed assets. A noncurrent asset is something that cannot be turned in cash within a normal operating cycle (Williams, Haka, & Bettner, 2005).
What differs between current and noncurrent assets?
The biggest difference between current and noncurrent assets is that one can be converted into cash within a normal operating cycle, current assets, and the other cannot, noncurrent assets. As stated before current assets can be sold off to give the company operating cash to prevent the company from being insolvent (Williams, Haka, & Bettner, 2005). Noncurrent assets can be used as collateral to attain a loan, I think.
What is the order of liquidity?
The order of liquidity is the order in which items appear on the balance sheet according to its solvency (Williams, Haka, & Bettner, 2005). This way a person looking at a balance sheet will know what will sell faster to raise money for the company should the need arise.
How does the order of liquidity apply to the balance …show more content…
sheet?
The order of liquidity on a balance sheet appears in the order according to the items closeness to cash (Williams, Haka, & Bettner, 2005). With cash being the first item on most balance sheets followed by investments in marketable securities, receivables, inventory, and prepaid expenses (Williams, Haka, & Bettner, 2005).
References
Williams, J.R., Haka, S.F., & Bettner, M.S. (2005). Financial and Managerial Accounting: The Basis for Business Decisions (13th ed.). New York, New York: McGraw−Hill.
|Content and Organization |Percent |Comments: |
|70 Percent |Earned: | |
| | | |
|All key elements of the assignment are covered in a substantive way. | | |
|What are current assets? | |You correctly addressed the |
|What are noncurrent assets? | |points, but your responses were |
|What differs between current and noncurrent assets? | |too brief. |
|What is the order of liquidity?
| | |
|How does the order of liquidity apply to the balance sheet? | | |
| | | |
|The content is comprehensive, accurate, and/or persuasive. | | |
|The paper develops a central theme or idea directed toward the | | |
|appropriate audience. | | |
|The paper links theory to relevant examples of current experience and | | |
|industry practice and uses the vocabulary of the theory correctly. | | |
|Major points are stated clearly; are supported by specific details, | |Major points clearly stated, but
|
|examples, or analysis; and are organized logically. | |brief. |
| | | |
|The introduction provides sufficient background on the topic and | |No introduction. |
|previews major points. | | |
|The conclusion is logical, flows from the body of the paper, and | |No conclusion. |
|reviews the major points. | | |
|Overall total |50 | |
|Readability and Style |Percent |Comments: |
|15 Percent |Earned: | |
| | | |
|Paragraph transitions are present and logical and maintain the flow | | |
|throughout the paper. | | |
|The tone is appropriate to the content and assignment. | |Good tone. |
|Sentences are complete, clear, and concise. | | |
|Sentences are well-constructed, with consistently strong, varied | |Well constructed sentences. |
|sentences. | | |
|Sentence transitions are present and maintain the flow of thought. | | |
|Overall total |15 | |
|Mechanics |Percent |Comments: |
|15 Percent |Earned: | |
| | | |
|The paper, including the title page, reference page, tables, and | |Good job. |
|appendices, follow APA guidelines for format. | | |
|Citations of original works within the body of the paper follow APA | | |
|guidelines. | | |
|The paper is laid out with effective use of headings, font styles, and| |Good use of subheadings. |
|white space. | | |
|Rules of grammar, usage, and punctuation are followed. | | |
|Spelling is correct. | | |
|Overall total |15 | |
|Total 100 percent |Percent |Comments: Troy, you did a great |
| |Earned 80 |job of addressing the topics, but|
| | |you needed more detail. The paper|
| | |is far too brief. You |
| | |demonstrated that you have a good|
| | |understanding of the topics. Your|
| | |sentences were varied. The use of|
| | |subheadings makes the paper flow |
| | |smoother. Please let me know if |
| | |you have any questions. |
|Points Possible 10 less 40% due to posting 4 days late =6 points |Percent Earned |Points Earned: 4.8 |
|possible. |80 X 6 Points Possible | |