Business

Current and Noncurrent Assets

Acc/400

September 1, 2013

Terrice Watson

Current and Noncurrent Assets

In this paper the reader will learn about current assets and noncurrent assets, and the difference between the two; also the order of liquidity and how it applies to the balance sheet. Asset is a resource with financial value a person, business retains, or controls with the anticipation that offers future profit. Assets are bought to raise the profit of a business. In the perspective of accounting, assets are either current or non-current.

According to "Current Assets Definition" (n.d.), “Current assets is an  entry on the balance sheet which total the amount of money such as accounts receivable, prepaid overheads, and other assets that could be transform to cash in less than one year.” A business's creditors will be concerned in how much that business has in current assets because these assets can be easily liquidated if the company goes out of business. Noncurrent assets are a business's long-term savings, in a circumstance that the worth will not be recognized in a year ("Noncurrent Assets Definition,” n.d.).  Noncurrent assets are profit from rather than disbursed.

The difference in current and noncurrent assets are current assets are assets that can be brought, borrowed or rented to create income or value for a company in the future. Current assets consist of money at hand or in a bank, current debtors, receivable bills of exchange, and short-term investments for future services. These current assets are used for important business operations within short time. Non-current assets or fixed assets are assets that are stationery. Noncurrent assets tend to stay in a company for a long time. These assets are not involved in the everyday operations of a company, and cannot be used to meet short-term obligation or responsibilities of a company. Noncurrent assets contain land, buildings, furniture, and office property. Fixed assets are assets whose current...