Current Assets

Nandini
2 min readJan 13, 2021

Current assets are the type of assets that would be used in one year or one operating cycle, whichever is longer.

Current assets include most liquid assets like Cash or Cash equivalent, Accounts receivable, Marketable securities, inventory, prepaid expenses, or other liquid assets.

They determine the operational funding of the business.

Let's define the few current assets:

  1. Cash or Cash Equivalent: It includes cash received by the company for delivering goods or services.
  2. Accounts receivable: The goods sold on credit whose payment is yet to receive, are classified as Account receivable.
  3. Inventory: This includes raw material, work in progress, and finished goods in which a business or company performs sales. Example: A company selling pen includes all material related to pen production and finished goods pen into its Inventory.
  4. Marketable securities: These are short time investments made by a business that matures within one year or business cycle, whichever is longer. Example: US Treasury bill.
  5. Prepaid expenses: The expense for which the payment has been made before that expense incurred. Example: Paying rent in advance.

Blue Fox Industries had the following account balances at year-end.

What is the amount of total current assets reported on the balance sheet?

Here the current assets are Cash, A/R, and Inventories. So summing them up, is 35000.

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