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Friday, April 20, 2012

Current Assets



Current assets are the more liquid assets a company has. That is the assets that can be easily converted into cash. Obviously cash would be a current asset. Since it already is cash it would not need to be converted into cash.

Another current asset would be inventory, which could be sold to convert it to cash.  Also accounts receivable would be considered to be a current asset because, hopefully, payment will be made on those accounts in the near future which would result in a conversion to cash.

Assets that are not considered to be current are called Fixed Assets. Fixed Assets are things like buildings, land, and fixtures. These are things that could be converted to cash but there is no ready market for them in most cases and therefore would require a longer timeframe to convert to cash.

Current Assets are carried on the Balance Sheet.


Disclaimer
The opinions or advice listed in this blog or website should be used as a place to start only. It is not a substitute for the use of a professional.
Please be sure to consult your attorney and/or accountant with any specific questions.
There is no one right answer to any business question that will cover all circumstances.
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