Current Assets and Noncurrent Assets
Current and Noncurrent Assets Paper
Johnnie Kersh
September 08, 2014
ACC/400
Kylene Smith
What is an asset? An asset is an item that is owned by customers and businesses. It has an economic value that can be converted into cash and help repay debts. It also tells how much a business has in value. Accounts receivables, cash, and securities are some examples of assets. Assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings that are found on the balance sheet (www.investorwords.com/273/asset.html). In accounting, assets are divided into different categories such as current assets, long-term assets, prepaid and deferred assets, and intangible assets (www.investorwords.com/273/asset.html). What is a balance sheet? It is a financial statement that shows the company’s assets, liabilities, and the owner’s equity. The asset equals liabilities plus shareholders’ equity is the formula for accounting equation. The balance sheet was naming that because the assets and liabilities have to balance out (www.investopedia.com/terms/b/balancesheet.asp). Learning and understanding the different types of assets and financial statements can help determine if a company will be successful in the future or not. What is a current asset? It is a balance sheet item that equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted into cash in less than one year (www.investorwords.com/1245/current_assets.html). Businesses need current assets to fund their daily operations. When a company’s assets fall short, they must find another funding to make up for the short fall. Cash and equivalents, short and long-term investments, accounts receivable, inventories, and prepaid expenses makes up different kinds of current assets. Bearer bonds and money market funds are assets that are money in the bank. If a company does not have a need
Johnnie Kersh
September 08, 2014
ACC/400
Kylene Smith
What is an asset? An asset is an item that is owned by customers and businesses. It has an economic value that can be converted into cash and help repay debts. It also tells how much a business has in value. Accounts receivables, cash, and securities are some examples of assets. Assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings that are found on the balance sheet (www.investorwords.com/273/asset.html). In accounting, assets are divided into different categories such as current assets, long-term assets, prepaid and deferred assets, and intangible assets (www.investorwords.com/273/asset.html). What is a balance sheet? It is a financial statement that shows the company’s assets, liabilities, and the owner’s equity. The asset equals liabilities plus shareholders’ equity is the formula for accounting equation. The balance sheet was naming that because the assets and liabilities have to balance out (www.investopedia.com/terms/b/balancesheet.asp). Learning and understanding the different types of assets and financial statements can help determine if a company will be successful in the future or not. What is a current asset? It is a balance sheet item that equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted into cash in less than one year (www.investorwords.com/1245/current_assets.html). Businesses need current assets to fund their daily operations. When a company’s assets fall short, they must find another funding to make up for the short fall. Cash and equivalents, short and long-term investments, accounts receivable, inventories, and prepaid expenses makes up different kinds of current assets. Bearer bonds and money market funds are assets that are money in the bank. If a company does not have a need
References: Retrieved from http://accountingtools.com/questions-and-answers/what-is-order-of-liquidity.htm Retrieved from http://financial-dictionary.thefreedictionary.com/Noncurrent-asset Retrieved from http://fool.com/investing/beginning/how-to-read-a-balancesheet Retrieved from http://investopedia.com/terms/b/balancesheet.asp Retrieved from http://investorwords.com/273/asset.html Retrieved from http://investorwords.com/1245/current_assets.html Retrieved from http://investorwords.com/3313/noncurrent_asset_html Retrieved from http://simplestudies.com/difference-between-current-and-noncurrent-assets-liabilities.hmtl/p