Chapter 3-Outline - Chapter 3 Balance Sheet Assets Future...

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Chapter 3 Balance Sheet Assets Future economic benefit Controlled by an entity Based on past transactions Current Assets Cash and assets which will become cash or consumed within one year or the operating cycle if longer. Listed in order of liquidity Cash Checks, checking accounts, savings accounts Marketable securities (short-term investments) 1. Ready market 2. Highly liquid 3. Commercial paper 4. Usually intent to hold for a short period of time Accounts Receivable 1. Monies due from customers 2. Shown net of allowance for uncollectibles
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Inventories 1. Goods held for resale to customers 2. Manufacturing a. Raw materials b. Work-in-process c. Finished goods 3. Supplies Prepaids 1. Expenditures for goods and service in advance 2. Usually real estate taxes, insurance, rent Long-term Assets Tangible Assets Known as property plant and equipment or fixed assets Land Presented at cost and not depreciated Buildings Presented at cost plus improvements less accumulated depreciation Machinery
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