ACC Week 1 Current Noncurrent Assets
Companies need to account for their daily activities, which can include the office supplies being used daily by its employees such as copy paper, toner, etc., as well as supplies that do not deplete, however are being used daily, such as copiers, fax machines, etc. The most common items are categorized on a balance sheet which will represent the value of all assets that are expected to be converted into cash within one year in the normal course of business (TD Bank.com, 2014). A balance sheet is where a creditor or investor will look to see how your company is progressing financially. The balance sheet is a written report of the company 's assets and liabilities. It specifically shows the current and noncurrent assets of the company.
It is first important to understand what each type of assets is. According to businessdictionary.com the definition of a current asset is “any item that a company has that can be converted into cash within a one year period” (businessdictionary.com, 2014). Some examples of assets are inventory, cash, pre-paid items, accounts receivables, and short term loans. These particular items will be sold, paid, or remain directly as cash within a 12 month period. For any business to start up, they must have basic assets in place such as cash, supplies, and inventory which have the ability to generate income for their business. These assets can generate income and also create a means which would add to the income generating process for the company. Current assets will either deplete or convert into cash within a (12) month period. Companies will continue to collect and convert accounts receivables into cash, thus making it a current asset. In most cases, current assets can be liquidated within a (12) month period or (1) fiscal year for the company. Current assets are placed on the balance sheet, usually on the right hand side.
On the other hand, noncurrent assets are the company 's long-term investments actual value will not be
It is first important to understand what each type of assets is. According to businessdictionary.com the definition of a current asset is “any item that a company has that can be converted into cash within a one year period” (businessdictionary.com, 2014). Some examples of assets are inventory, cash, pre-paid items, accounts receivables, and short term loans. These particular items will be sold, paid, or remain directly as cash within a 12 month period. For any business to start up, they must have basic assets in place such as cash, supplies, and inventory which have the ability to generate income for their business. These assets can generate income and also create a means which would add to the income generating process for the company. Current assets will either deplete or convert into cash within a (12) month period. Companies will continue to collect and convert accounts receivables into cash, thus making it a current asset. In most cases, current assets can be liquidated within a (12) month period or (1) fiscal year for the company. Current assets are placed on the balance sheet, usually on the right hand side.
On the other hand, noncurrent assets are the company 's long-term investments actual value will not be
References: Businessdictionary.com (2014) Definition of current assets. http://www.businessdictionary.com/definition/current-asset.html TD Bank.com (2014). Preparing a Balance Sheet. Retrieved from: http://www.tdbank.com/small_business/workshops/BalanceSheet/textbalance.htm