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Current and Noncurrent Asset Paper

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Current and noncurrent Assets
In every business, the accounting department is an essential part in the maintenance of the organization. Understanding assets and their importance to the accounting process is imperative for any company. Without assets organizations could not operate. Current and noncurrent assets are the two assets this paper will address. In addition, this paper will also address the order of liquidity as well as how the order of liquidity applies to the balance sheet.
Current Assets
Current assets are cash and other resource that companies reasonably expect to convert to cash or use up within one-year or the operating cycle, whichever is longer (Kimmel, Weygandt, & Kieso, 2007). Current assets consist of cash, short-term investment, receivables, inventories, and pre-paid expenses. These types of assets are critical to the organization because they are a source of funds necessary for the day-to-day operation of the company.
Noncurrent Assets Noncurrent assets are long-term assets that organizations intent to hold for at least a one-year period or longer and are not easily convertible to cash. Property, plant, and equipment and intangible assets (patents, trademarks, and licenses), and natural resources (mines, silver, and gold, etc.) are several types of noncurrent assets. These assets are important to the financial health of an organizations operation; they provide a constant source of revenue.
Difference between current and noncurrent assets
The differences between current and noncurrent assets are the period it takes to convert the assets into cash and form. Current assets are short-term assets that can be sold or used within a business cycle, which is usually a year. Current assets do not depreciate within a year. Contrary to current assets, noncurrent assets are long-term assets that cannot be liquidated within a year. For...

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