What is current assets and non current assets?

Answer 1

current is all visible and non current assets are not visible like preleminary exp, good will etc

• Current Assets

  Current Assets include Cash and Assets that will be converted into cash or consumed in a relatively short period of time, usually within a year or the business's operating cycle. Prepaid Expenses and Supplies (already paid for or a liability incurred) are included because they will normally be used or consumed within the operating cycle.

  • Cash and Cash Equivalents

    Anything accepted by a bank for deposit is considered as Cash or Cash Equivalents. Cash in the form of coins and currency, undeposited checks, money orders, deposits in banks are examples. The cash must be available for immediate use and not restricted in any manner.

    • Cash On Hand
      • Cash Register Drawer(s) Funds
      • Undeposited Cash
    • Petty Cash
    • Bank Checking Accounts
      • General
      • Payroll
    • Savings Accounts
    • Money Market Accounts
  • Short-Term Investments

    Short-Term Investments include readily marketable securities that can easily be sold and converted back into cash. These type of investments normally result from a business in the lucky position of having excess cash available. The invested should be temporary in nature and not made to exercise control over another business or satisfy any other requirements and/or agreements. Reported at current market value by using an allowance for unrealized market gains and losses.

    • Certificates of Deposit
    • Stocks
    • Bonds
    • Other Short Term Investments
    • Valuation Allowance for Market Value Fluctuations
  • Receivables

    Included in this category are Accounts Receivable (open account customer balances resulting from sales) and customer Notes (principal and interest resulting from sales) that are formalized agreements and evidenced in writing. Short term temporary loans and advances are also included. An allowance for estimated uncollectible amounts is also provided.

    • Accounts Receivable

      This account will normally have a sub ledger that contains a record for each customer or client.

    • Allowance For Bad Debts (Contra Account)

      Used to record customer accounts that may not be collected.

    • Trade Notes Receivable - Current principal portion
    • Interest Receivable
    • Other Receivables
      • Short Term Owner Loans and Advances
      • Short Term Employee Loans & Advances
      • Short Term Travel and Expense Advances
  • Inventory

    The accounts set up in the inventory section depend on the type of business. Is the business a service, retailer, wholesaler or manufacturer ? For retailers and wholesalers an inventory sub ledger is usually maintained to keep track of each individual product. Manufacturing types of businesses usually and Service types of businesses occasionally maintain sub legers for projects, jobs, and processes.

    • Manufacturer
      • Raw Materials
      • Manufacturing Supplies
      • Work In Process
        • Direct Labor
        • Direct Material
        • Manufacturing Costs
          • Direct Labor
          • Direct Material
          • Manufacturing Overhead - Actual
            • Indirect Labor
            • Supervision Salaries
            • Fringe Benefits
            • Manufacturing Supplies
            • Small Parts
            • Perishable Tools
            • Utilities
            • Depreciation
            • Rent
            • Leases
            • Repairs & Maintenance
            • Insurance
            • Property Taxes
          • Overhead Costs Applied
        • Finished Goods
      • Retailer or Wholesaler
        • Merchandise Inventory
        • Store Supplies
      • Service
        • Work In Process - Projects / Jobs
        • Completed / Unbilled Projects / Jobs
      • Common To All
        • Office Supplies
    • Prepaid Expenses

      Prepaid Expenses are assets created by the early payment of cash or assuming a liability. They expire and are charged to expenses based on the passage of time, usage, or other factors. All Prepaid Expenses could be recorded in a single account or separate accounts could be used for each different type.

      • Prepaid Insurance
      • Prepaid Rent
      • Prepaid Advertising
      • Prepaid Interest
      • Other Prepaid Expenses
    • Other Current Assets

      This category includes other current assets that do not neatly fit into any of the other categories. The amounts must be deemed collectible in a relatively short period of time (operating cycle).

      • Notes Receivable - Current principal portion of Long-term Notes
      • Other Current Assets
  • Long-Term Investments

    Investments that are intended to be held and not converted into cash for an extended period of time (longer than the operating cycle). Reported at current market value by using an allowance for unrealized market gains and losses.

    • Stocks
    • Bonds
    • Other Long Term Investments
    • Valuation Allowance for Market Value Fluctuations
  • Property, Plant, and Equipment

    Assets of a durable nature that are used to provide current and future economic benefits to the business.

    These accounts will normally have a sub ledger that contains a record for each parcel of land, building, or piece of machinery and equipment along with depreciation calculations and amounts.

    • Land
    • Buildings
    • Accumulated Depreciation - Buildings (Contra Account)
    • Building Improvements
    • Accumulated Depreciation - Building Improvements (Contra Account)
    • Machinery and Equipment
    • Accumulated Depreciation - Machinery and Equipment (Contra Account)
    • Office Equipment
    • Accumulated Depreciation - Office Equipment (Contra Account)
    • Computer Equipment
    • Accumulated Depreciation - Computer Equipment (Contra Account)
    • Vehicles
    • Accumulated Depreciation - Vehicles (Contra Account)
    • Furniture and Fixtures
    • Accumulated Depreciation - Furniture and Fixtures (Contra Account)
    • Leasehold Improvements
    • Accumulated Amortization - Leasehold Improvements (Contra Account)
    • Computer Software
    • Accumulated Amortization - Computer Software (Contra Account)
    • Other Property, Plant, or Equipment
    • Accumulated Depreciation - Other Property, Plant, or Equipment
  • Other Noncurrent Assets

    All assets that are noncurrent and that do not fit neatly into any of the other categories.

    • Long Term Owner Loans & Advances
    • Long Term Employee Loans & Advances
    • Notes Receivable - Long-term principal portion of Long-term Notes
    • Security Deposits
    • Intangible Assets
      • Patents
      • Organization Costs
      • Goodwill
      • Accumulated Amortization (Contra Account)
• Liabilities

  Formal Definition:Claims by creditors to the property (assets) of a business until they are paid.

  Informal Definition:Other's claims to the business's stuff. Amounts the business owes to others.

  Additional Explanation: Usually one of a business's biggest liabilities (hopefully they are not past due) is to suppliers where they have bought goods and services and charged them.

  Liabilities are listed in the order of their expected payment date (maturity). In other words, how soon they must be repaid. Liability accounts are separated into current (short-term) liabilities and long-term liabilities. Short-Term Liabilities generally are debts that must be repaid within 1 year from the date of the balance sheet. Long-Term Liabilities are debts that must be paid more than 1 year from the date of the balance sheet.

  • Current Liabilities

    Current liabilities are the portion of obligations (amounts owed) due to be paid within the current operating cycle (normally a year) and that normally require the use of existing current assets to satisfy the debt.

    • Short Term Notes (Demand Notes)
    • Accounts Payable Trade

      A sub ledger is normally maintained in order to keep up with and track amounts owed to individual suppliers.

    • Accounts Payable Other
    • Payroll Liabilities
      • Accrued Salaries and Wages Payable
      • Employee Payroll Withholdings (Deductions)
        • Employee U.S. Federal Income Tax Withheld
        • Employee State Income Tax Withheld
        • Employee Local Income Tax Withheld
        • Employee FICA Withheld
        • Employee Medicare Withheld
        • Employee Garnishments Withheld
        • Employee Benefits
          • Employee Insurance Deduction Withheld
          • 401 K Deduction Withheld
          • IRA Deduction Withheld
        • Other Payroll Withholdings
      • Employer Provided Benefits
        • Mandatory
          • Employer FICA Contribution Payable
          • Employer Medicare Contribution Payable
          • Employer Federal Unemployment Payable
          • Employer State Unemployment Payable
          • Employer Workmen's Compensation Insurance Payable
        • Optional
          • Employer Provided Health Insurance Payable
          • Employer Provided Life Insurance Payable
          • Employer Provided 401 K Contributions Payable
          • Employer Provided IRA Contributions Payable
    • Sales Tax Payable
    • Unearned Revenues
    • Customer Advances and Deposits Payable
    • Interest Payable
    • Bank Loans (Notes Payable) - Current principal portion of Long-Term Notes
    • Notes Payable (other than bank notes) - Current principal portion of Long-Term Notes
    • Accrued and Estimated Liabilities
      • Accrued / Estimated Taxes Payable
        • Accrued real estate and Property Taxes Payable
        • Accrued Income and Franchise Taxes Payable
          • Accrued Federal Taxes Payable
          • Accrued State Taxes Payable
          • Accrued Local Taxes Payable
      • Other Accruals Payable
    • Other Current Liabilities
  • Long-Term Liabilities

    Long term liability accounts are the portions of debts with due dates greater than a year or the operating cycle. These are obligations that are not expected to be paid within the current operating cycle.

    • Bank Loans (Notes Payable) - Long Term principal portion
    • Notes Payable (other than bank notes) - Long Term principal portion
    • Other Long-Term Liabilities
• Equity (Capital)

  Formal Definition:The owner's rights or claims to the property (assets) of the business.

  Informal Definition:What the business owes the owner(s). The good stuff left for the owner(s) assuming all liabilities (amounts owed) have been paid.

  The accounts set up in this section will depend on the legal structure of your business. These accounts report the Owner's Capital Invested and the Accumulated Profits or Losses for the business since it began. Owner sub ledgers may also be maintained to keep up with and track shares and interests and amounts owed individual owners.

  • Sole Proprietorship
    • Owner's Capital
    • Owner's Drawing
  • Partnership or Limited Liability Company
    • Partner's or Member's Capital
    • Partner's or Member's Drawing
  • Corporation
    • Capital Stock
      • Common Stock
        • Common Stock Par or Stated Value
        • Premium Paid on Common Stock
      • Preferred Stock
        • Preferred Stock Par or Stated Value
        • Premium Paid on Preferred Stock
    • Retained Earnings