Accounting assistance?
Question:
Cash
Short-term investments
Receivables (net)
Inventories
Prepaid expenses
Land
Building and equipment (net)
Which of the above are current assets? Choose all that apply. I need to know because I have to find the current ratio. I am just not sure which are current assets.
Same with these below here:
Which are current liabilities?
Liabilities and Stockholders' Equity
Notes payable
Accounts payable
Accrued liabilities
Bonds payable, due 2009
Common stock ($10 par)
Retained earnings
Answer:
Current assets=
Cash
Receivables
Short term investments
Pre-paid Expenses
Inventories
The other two are long term investments (Land and buildings)
Current Liabilities=
Accounts Payable
Accrued Liabilities
Any Liability which is expected to be paid off in one year or cycle. Common Stock and Retained earnings are Stockholder's equity, so they don't count. Bonds payable is a long term liability.
The term "current" when dealing with assets and liabilities refers to the timing of the transaction. Current liabilities are due within one year or less. If you have a loan outstanding for $1,000, and the loan is a five year loan, the current liability is $200, and the remaining balance goes into your long-term liabilities. The following year, the next $200 becomes your current liabilities and the remaining balance of $600 is the long-term portion.
The same theory applies to your assets. Current assets are assets that will be recognized in the current year, such as your receivables from customers. Your land and building, which have useful lives of many years, are not considered current. When dealing with your prepaid accounts, any portion that will be used in the current fiscal year are considered current.
The term current has to do with timing only. All debts to be paid within the current fiscal year are current liabilities, and all assets to be recognized during the current fiscal year are recordeed as current assets. Cash is a current asset, short term investments that are to be collected during the cuurent fiscal year are current assets, etc...
cash, short term investments, receivables(only those due w/i a year) inventories preaid expenses. all current assets
NP AP common stock and retained earnings on the bottom
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