Accounting 3
Classified in Mathematics
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English with a size of 2.84 KB
1. TRACING CASH AND NET WORKING CAPITAL
Current assets are cash and other assets that are expected to convert to cash within a year. They are presented on the balance sheet in order of their accounting liquidity. Four of the most important items in this section of the balance sheet are cash and cash equivalents, marketable securities, accounts receivable and inventories.Firms use several kinds of short-term debt called current liabilities, which are obligations that are expected to require cash payment within one year or within the operating period if it is longer than one year. Three major items as current liabilities are accounts payable, accrued wages, taxes and notes payable.
2. DEFINING CASH IN