...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 ...
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...Weygandt, & Kieso, 2011, p. 5). This system covers a broad array of information but in this paper the current and noncurrent assets will be defined, contrasted, and compared. In addition, the order of liquidity and how this practice applies to the balance sheet will be reviewed. Accounting is the means of communicating the numbers and to be successful in business the numbers have to be known “cold”. Therefore, it is imperative not only to communicate the numbers effectively but also to understand them to thrive in a world submerged with figures. Current Assets To understand assets, they first must be defined. Assets are resources such as land, computers, buildings, cash, and supplies owned by an organization. Cash is the most important asset that any business can possess. Consequently, cash is considered a current asset. Current assets are those resources that a business anticipates to replace with cash or deplete within 12 months or its operating cycle dependent upon whichever is farther away. The common practice for most businesses is the cutoff to be classified as current assets is one year from the balance sheet date. Current assets include short-term investments, cash, receivables, prepaid expenses, and inventories. For example, accounts receivable are current assets because a firm expects to collect payments and convert these payments to cash within one year. Businesses list current assets in the order in...
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...Current and Noncurrent Assets Paper Elizabeth Webb ACC/400 August 18, 2011 Frank Gutierrez Abstract The purpose of this paper is to address the meanings of current and noncurrent assets while stating their differences. The paper will also include what the order of liquidity is and how it applies to the balance sheet. Current and Noncurrent Assets Paper Current Assets Current assets, also known as short-term, “are cash and other resources that are reasonably expected to be realized in cash or sold or consumed within one year of the balance sheet date or the company's operating cycle, whichever is longer” (simplestudies.com). Current assets is also a balance sheet item that will equal the total of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash in less than one year. A company's creditors will often be interested in how much that company has in current assets, since these assets can be easily liquidated in case the company goes bankrupt. In addition, current assets are important to most companies as a source of funds for day-to-day operations. Noncurrent Assets Noncurrent assets, also known as long-term, are assets that are not easily converted into cash or that are not expected to turn into cash within the following year. Examples of noncurrent assets include fixed assets, leasehold improvements, and intangible assets. Noncurrent assets are the complete...
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...Current and Noncurrent Assets Paper University of Phoenix ACC/400 John Opincar December 09, 2010 Current and Noncurrent Assets Paper The classified balance sheet displays a picture of a corporation’s financial status at any stage. To enhance user’s comprehension of an organization’s financials, the balance sheets are typically position in a specific order whereby, financial statements elements are categorize in subgroups such as current and noncurrent. These groups determine, for example, if the corporation has sufficient resources toward balances due, and the demands of immediate and continuing creditors on the corporation entire assets. This paper will explain the differences and similarities between current and noncurrent assets, define the order of liquidity, and how does the order of liquidity apply to the balance sheet. The current assets are assets, which a company anticipates to change to currency or spend by year-end. Classification as current assets is one-year from the balance sheet date for the majority of companies. For instance, a business will accumulate their accounts receivable known as current assets and change them to currency by year-end. Supplies are current assets and essential during operation; therefore, used by year-end. Classify assets and liabilities as current for a period longer than a year, by countless businesses because of their operating cycle. The business operating cycle is the standard period necessary to buy...
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...in the black and white tables of assets and debits can, that the company is important and prosperous” (Schudson). Current and Noncurrent assets is important to have for any business. In this paper the subject is to discuss both of these and what the differences are between those. Also to understand the order of liquidity and the order of liquidity apply to the balance sheet. What are current assets? Current assets are the value of certain assets that can be converted into cash within a year or less. Current assets are important for any business to have because it provides the company the funds to operate day-to-day. Some of the current assets which a business may have on hand that can be easily converted into cash are inventory, accounts receivable, and cash itself. One way to look at it is that an owner of a restaurant recently received a shipment in of fruits and vegetables they can turn this into cash by serving many dishes with the fresh fruit and vegetables in it. Noncurrent assets are one that could not be turned in cash in a span 12 months or longer. This is also a necessity for any business to have. What noncurrent assets entails is equipment purchased for the business to operate, the plant or store itself. This is something that a company cannot sell right away but one could sell down the road to provide the business with upgrades. It may also provide enough cash to move into a bigger facility. A noncurrent asset like machinery and equipment is known...
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...Comparing and Contrasting Current and Noncurrent Assets In financial accounting, a balance sheet statement is one of the main financial statements that managers and investors look at when looking at the financial health of any company. The balance sheet consists of assets, liabilities and ownership equity at a specific date in time. Most balance sheet statements are created to reflect the financial health of the company at the end of the company’s fiscal period. This paper will be focusing on comparing and contrasting the two categories of assets. Assets can be divided in to two categories; current and noncurrent asset. These two categories of assets are an essential part of financial statements and are found in the balance sheet statement of any company. Current assets are defined as “the value of all assets that are reasonably expected to be converted into cash within one year in the normal course of business” (“Current Assets”, n.d). Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be easily changed into cash. Current assets in personal financing follow the same concept as assets in a company. Current assets in personal financing are all assets that a person can readily convert into cash to pay outstanding debts and cover liabilities without having to sell any of their fixed assets (“Current Assets”, n.d). Noncurrent or fixed assets are defined as a company’s long-term investments where...
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...Current and Noncurrent Assets Paper ACC/400 Professor May 01, 2013 Comparing and contrasting current and noncurrent Current assets Current assets are also identified as liquid assets or short term assets. The Accounts Receivables department is where the most common current assets can be found. Furthermore, they can be found in the form of invoices. Current assets can be described as any assets that can be turned into cash in less than a year. Additional forms of current assets are things such as short-term investments, inventory, and cash. Many companies view current assets as all things that can be converted into cash within an operating cycle. This is a year for most companies. However, companies can have an operating cycle of more than a year; it is mainly according to their operating cycle. Noncurrent assets Noncurrent assets are basically the opposite of current asset. Noncurrent assets are considered to be long term assets. The noncurrent assets include things such as fixed assets, intangible assets and long-term investments. The noncurrent assets cannot be turned in cash within a normal operating cycle. The difference between the assets The main difference between current and noncurrent assets is that current assets can be turned into cash within a normal operating cycle and noncurrent assets cannot. The current asset is more of a short term and the noncurrent asset is more of an long term asset. The current...
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...at: SUPPORT@ACTIVITYMODE.COM ACC 400 ENTIRE COURSE ACC 400 Entire Course ACC 400 Week 1 DQ 1 ACC 400 Week 1 DQ 2 ACC 400 Week 1 DQ 3 ACC 400 Week 1 Individual Current and Noncurrent Asset Paper ACC 400 Week 2 DQ 1 ACC 400 Week 2 DQ 2 ACC 400 Week 2 DQ 3 ACC 400 Week 2 Individual Questions from the readings ACC 400 Week 2 LTA Assignments from Readings ACC 400 Week 3 DQ 1 ACC 400 Week 3 DQ 2 Horizontal Analysis ACC 400 ENTIRE COURSE To purchase this visit following link: http://www.activitymode.com/product/acc-400-entire-course/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACC 400 ENTIRE COURSE ACC 400 Entire Course ACC 400 Week 1 DQ 1 ACC 400 Week 1 DQ 2 ACC 400 Week 1 DQ 3 ACC 400 Week 1 Individual Current and Noncurrent Asset Paper ACC 400 Week 2 DQ 1 ACC 400 Week 2 DQ 2 ACC 400 Week 2 DQ 3 ACC 400 Week 2 Individual Questions from the readings ACC 400 Week 2 LTA Assignments from Readings ACC 400 Week 3 DQ 1 ACC 400 Week 3 DQ 2 Horizontal Analysis ACC 400 ENTIRE COURSE To purchase this visit following link: http://www.activitymode.com/product/acc-400-entire-course/ Contact us at: SUPPORT@ACTIVITYMODE.COM ACC 400 ENTIRE COURSE ACC 400 Entire Course ACC 400 Week 1 DQ 1 ACC 400 Week 1 DQ 2 ACC 400 Week 1 DQ 3 ACC 400 Week 1 Individual Current and Noncurrent Asset Paper ACC 400 Week 2 DQ 1 ACC 400 Week 2 DQ 2 ACC 400 Week 2 DQ 3 ACC 400 Week 2 Individual Questions from the readings ACC 400 Week 2 LTA Assignments from Readings ...
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...A++PAPER;http://www.homeworkproviders.com/shop/acc-401-week-3-quiz/ ACC 401 WEEK 3 QUIZ ACC 401 Week 3 Quiz, ACC 401 Week 3 Quiz - Strayer Chapter 3 Consolidated Financial Statements—Date of Acquisition Multiple Choice 1. A majority-owned subsidiary that is in legal reorganization should normally be accounted for using a. consolidated financial statements. b. the equity method. c. the market value method. d. the cost method. 2. Under the acquisition method, indirect costs relating to acquisitions should be a. included in the investment cost. b. expensed as incurred. c. deducted from other contributed capital. d. none of these. 3. Eliminating entries are made to cancel the effects of intercompany transactions and are made on the a. books of the parent company. b. books of the subsidiary company. c. workpaper only. d. books of both the parent company and the subsidiary. 4. One reason a parent company may pay an amount less than the book value of the subsidiary's stock acquired is a. an undervaluation of the subsidiary's assets. b. the existence of unrecorded goodwill. c. an overvaluation of the subsidiary's liabilities. d. none of these. 5. In a business combination accounted for as an acquisition, registration costs related to common stock issued by the parent company are a. expensed as incurred. b. deducted from other contributed capital. c. included in the investment cost. d. deducted...
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...common stock or other forms of shareholders’ equity, nor does it have retained earnings. Investing: Similar to business firms, charitable organizations acquire productive capacity (for example, buildings) to carry out their activities. Operations: A charitable organization might prepare financial statements that compare inflows (for example, contributions) with outflows. While these statements might appear similar to income statements, there would be no calculation of net income because the purpose of the charitable organization is to provide services to its constituents, not seek profits. 1.3 The balance sheet shows assets, liabilities and, shareholders’ equity as of a specific date (the balance sheet date), similar to a snapshot. The income statement and statement of cash flows report changes in assets and liabilities over a period of time, similar to a motion picture. 1.4 The auditor evaluates the accounting system, including its ability to...
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...accounted for using a. consolidated financial statements. b. the equity method. c. the market value method. d. the cost method. 2. Under the acquisition method, indirect costs relating to acquisitions should be a. included in the investment cost. b. expensed as incurred. c. deducted from other contributed capital. d. none of these. 3. Eliminating entries are made to cancel the effects of intercompany transactions and are made on the a. books of the parent company. b. books of the subsidiary company. c. workpaper only. d. books of both the parent company and the subsidiary. 4. One reason a parent company may pay an amount less than the book value of the subsidiary’s stock acquired is a. an undervaluation of the subsidiary’s assets. b. the existence of unrecorded goodwill. c. an overvaluation of the subsidiary’s liabilities. d. none of these. 5. In a business combination accounted for as an acquisition, registration costs related to common stock issued by the parent company are a. expensed as incurred. b. deducted from other contributed capital. c. included in the investment cost. d. deducted from the investment cost. 6. On the consolidated balance sheet, consolidated stockholders’ equity is a. equal to the sum of the parent and subsidiary stockholders’ equity. b. greater than the parent’s stockholders’ equity. c. less than the parent’s stockholders’ equity. equal to the parent’s stockholders’ equity. 7. Majority-owned subsidiaries...
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...Current and Non-Current Assets Sonia Elias ACT400 February 14, 2013 Debra Luna Abstract In accounting there are two major types of assets which include current assets and non-current asset which are used to know the solvency a company can have and the facility to pay their bills and the liquidity of it. Current and Non-Current Assets In accounting there are the major equation what it is assets equal liabilities plus stock holders equity, and this is the main equation. Assets are the solvency a person or business has economically that can help provide for the future. There are also current assets and non-current. * Current Assets * Current Assets are anything that a business or individual can be used in a year or less. * According to According to "Accounting Coach" (2013), "Cash and other resources that are * Expected to turn to cash or to be used up within one year of the balance sheet date. (If a * Company’s operating cycle is longer than one year; an item is a current asset if it will turn to * cash or be used up within the operating cycle.) Current assets are presented in the order of * liquidity, i.e., cash, temporary investments, accounts receivable, inventory, supplies, prepaid * insurance” (para. 1). As the first current assets is cash what is the money the company or the * individual has in hand. Schoereder, Clark, and Cathey (2005) The accurate measurement of cash * is important not only because...
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...Chapter 3 The Balance Sheet and Financial Disclosures AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, we have labeled each question, exercise, and problem in Intermediate Accounting, 7e with the following AACSB learning skills: |Questions |AACSB Tags |Exercises (cont.) |AACSB Tags | |3–1 |Reflective thinking |3–3 |Reflective thinking | |3–2 |Reflective thinking |3–4 |Analytic | |3–3 |Reflective thinking |3–5 |Analytic | |3–4 |Reflective thinking |3–6 |Analytic | |3–5 |Reflective thinking |3–7 |Analytic | |3–6 |Reflective thinking ...
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...ACC 400 ENTIRE COURSE TO purchase this tutorial visit following link: http://wiseamerican.us/product/acc-400-entire-course/ Contact us at: SUPPORT@WISEAMERICAN.US ACC 400 ENTIRE COURSE ACC 400 Week 1 DQ 1 ACC 400 Week 1 DQ 2 ACC 400 Week 1 DQ 3 ACC 400 Week 1 Individual Current and Noncurrent Asset Paper ACC 400 Week 2 DQ 1 ACC 400 Week 2 DQ 2 ACC 400 Week 2 DQ 3 ACC 400 Week 2 Individual Questions from the readings ACC 400 Week 2 LTA Assignments from Readings ACC 400 Week 3 DQ 1 ACC 400 Week 3 DQ 2 Horizontal Analysis ACC 400 Week 3 Individual Assignments from Readings ACC 400 Week 3 Learning Team Assignment E11-1 ACC 400 Week 4 DQ 1 ACC 400 Week 4 DQ 2 ACC 400 Week 4 DQ 3 ACC 400 Week 4 LTA Interpreting Financial Statements Report ACC 400 Week 4 Power Point Presentation ACC 400 Week 5 Assignments BYP13-7 23.10 and 23.12 ACC 400 Week 5 DQ 1 ACC 400 Week 5 DQ 2 ACC 400 Week 5 Final Exam ACC 400 Week 5 Individual Assignment Debt versus Equity Financing Paper ACC 400 ENTIRE COURSE ACC 400 Week 1 DQ 1 ACC 400 Week 1 DQ 2 ACC 400 Week 1 DQ 3 ACC 400 Week 1 Individual Current and Noncurrent Asset Paper ACC 400 Week 2 DQ 1 ACC 400 Week 2 DQ 2 ACC 400 Week 2 DQ 3 ACC 400 Week 2 Individual Questions from the readings ACC 400 Week 2 LTA Assignments from Readings ACC 400 Week 3 DQ 1 ACC 400 Week 3 DQ 2 Horizontal Analysis ACC 400 Week 3 Individual Assignments from Readings ACC 400 Week 3 Learning Team Assignment E11-1 ACC 400 Week 4 DQ 1 ACC 400...
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...Sheets Walmart’s Statement of Financial Position on January 31, 2012 is given below together with some transactions reported during the fiscal year 2012. |(Amounts in millions) |January 31, 2012 | |Assets | | |Current assets: | | | Cash and cash equivalents |$6,550 | | Receivables |5,937 | | Inventories |40,714 | | Prepaid expenses and other |1,774 | | Total current assets |54,975 | |Property and equipment, at cost: | | | Land ...
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