Current and Non-Current Assets Paper
What are current assets?
What are non-current assets?
What differs between current and non-current assets?
What is the order of liquidity?
How does the order of liquidity apply to the balance sheet?
Talking about current assets, non-current assets and what differs between them. The order of
liquidity and how that order applies to the balance sheet in these businesses today.
The six principles of internal control are: establishment of responsibility,
segregation of duties, documentation procedures, physical mechanical, and
electronic controls, independednt internal verification, and other controls.
Current assets are items on a balance sheet. According to Investorwords, current assets
equal “…the sum of cash and cash equivalents, accounts receivable, inventory, marketable
securities, prepaid expenses, and other assets that could be converted to cash in less than
one year,” (2008). If a company goes bankrupt, current assets are easily liquidated.
Additionally, current assets are a source of funds for most companies.
The importance of current assets to businesses is that these assets fund daily operations
and expenses. Not only are current assets expected to be turned into cash, they many be
sold, or consumed within a year. By contrast, non-current assets are not “…easily
convertible to cash or not expected to become cash within the next year,” (Investorwords,
Small and medium-sized businesses rely on a steady, consistent stream of
incoming cash (for us cash/check) equals the samething – customers
paying for goods and services with cash, checks, and credit cards. Many
retail and service businesses have multiple people conducting cash