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Current and Noncurrent Assets Paper
Scarlett Halifax
Acc/400
February 25,2013
Mrs. Portugal
Abstract
Accounting looks at many different things in the company’s financial history. This study is an important part of a company’s financial health. If a company does not have good financial health, then in all honesty the company would no longer be in business.
Introduction
There are many pieces of the accounting puzzle. In order for a company to be successful and maintain longevity in today’s business world, it is important to have clear and precise understanding of these pieces. This essay we will look at a couple of those pieces. They are Current and Noncurrent Assets. The difference between them and we will also look at the order of liquidity and how it applies to the balance sheet.
Current Assets
In a corporate setting, current assets are defined as an account located on the balance sheet, which represents the value of all assets that can be relatively easy to convert into cash within one year, which is a normal business cycle.
Assets that are considered current are such things as accounts receivables, cash, marketable securities, prepaid expenses and other liquid assets. If you are looking at current assets in your personal finances these are the things that you can convert into cash without selling fixed assets.
Noncurrent Assets
Noncurrent Assets are defined as the long-term investments where full value is not realized within a normal business year. These assets are often capitalized rather than expensed. The cost is allocated over several years in which the asset is being used by the company, instead of allocating the full cost in one year. Noncurrent assets include intangible asset like brand recognition, goodwill, and investment in another company. ("Investopiedia", n.d.).
The Difference between Current and Noncurrent Assets
As we have already learned both current and noncurrent assets are things that are used and valued by...