文档介绍：unit 6 Assets—Current Assets Ⅰ
Unit 6 Assets—Current Assets Ⅰ
Ⅰ1>. Definition of Current Assets
Ⅱ. Current Assets Accounts
Assets
Definition:
Assets are economic resources that are measurable in ary terms and owned or controlled by an enterprise for the purpose of making profits.
Recognition condition:
An asset is recognized on the balance sheet when
①it is probable that the future economic benefits will flow to the enterprise and
②the asset has a cost or value that can be reliably measured.
Ⅰ. Definition of Current Assets
Current assets are assets that are expected to be converted to cash, sold or consumed within 12 months or within the business’s normal operating cycle if longer than a year.
Current assets should include cash, short-term investment, receivable, prepayment and inventory.
Current assets on the balance sheet represent pany's liquidity. The more cash and short-term investments on hand, the lower a firm's risk of failure because management can use the money to carry itself through tough periods.
Ⅱ. Current Assets Accounts
101 Cash
102 Accounts Receivable
103 Notes Receivable
104 Office Supplies
105 Equipment
106 Inventory
107 Prepaid Insurance
108 Land
109 Accumulated Depreciation
110Intangible Assets
1. Cash
Content
Cash includes coins, paper money, checks, money orders, and money in deposit.
Place
On balance sheet, cash is listed first among the current assets, because it is the most current and liquid of all assets.
Amount
Cash and cash equivalents are accounted for according to the actual amount of receipt and payment.
Cash and Cash Equivalents
Cash and Cash Equivalents is the amount of money pany has in bank accounts, savings bonds, certificates of deposit, and money market funds. It tells you how much money is available to the business immediately.
Cash is a vital factor in the operation o a business, since many business transaction involve cash.
Cash is most subject to theft and fra