Current Assets vs. Non Current Assets

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Current Assets vs. Non Current Assets

Current assets are listed on the balance sheets in accounting. The total of all the cash that you have in your business or account is your current assets on your balance sheet. These assets include the following: cash, accounts receivables,, inventory, marketable securities, prepaid expenses, and anything else that you can think of that could be convert to cash in less than a year. When a company goes bankrupt the assets of a company are important because a bank may want to liquidate the company’s assets. These assets can also be important when you are trying to leverage asset to get loans for the company.

Noncurrent assets
Anything that is not a current asset is a noncurrent asset. These noncurrent assets are all non tangible types of assets, these assets are as follows: goodwill, PPE, and long-term invests are a few. Any asset that fits into the theory of not being able to turning into cash in 1 yr is also considered a noncurrent asset. Buildings land and equipment as well as other asset that can be held for a long period of time is also called noncurrent assets. In the sense you can imagine why noncurrent assets are more risky and profitable all at once. This is because they can’t be easily turned into cash and their value goes up and down constantly. Difference between current and noncurrent assets

Both current and noncurrent assets are very important, they both are equally important. As explained earlier in this paper, current assets are tangible in nature and theory and noncurrent assets are not. Current assets are generally smaller, such as cash and inventory, the noncurrent assets and generally larger things such as buildings and land. This is a matter of profit generating vs. Income generation. Order of liquidity

The order of Liquidity has to do with how fast a asset will take to liquidate. Think about it in the term of cash vs. something that you must sell in order to become liquid.

Order of liquidity...
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