Noncurrent Assets

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Current and Noncurrent Assets Paper
ACC/400
Professor
May 01, 2013

Comparing and contrasting current and noncurrent

Current assets

Current assets are also identified as liquid assets or short term assets. The Accounts Receivables department is where the most common current assets can be found. Furthermore, they can be found in the form of invoices. Current assets can be described as any assets that can be turned into cash in less than a year. Additional forms of current assets are things such as short-term investments, inventory, and cash. Many companies view current assets as all things that can be converted into cash within an operating cycle. This is a year for most companies. However, companies can have an operating cycle of more than a year; it is mainly according to their operating cycle.

Noncurrent assets

Noncurrent assets are basically the opposite of current asset. Noncurrent assets are considered to be long term assets. The noncurrent assets include things such as fixed assets, intangible assets and long-term investments. The noncurrent assets cannot be turned in cash within a normal operating cycle.
The difference between the assets

The main difference between current and noncurrent assets is that current assets can be turned into cash within a normal operating cycle and noncurrent assets cannot. The current asset is more of a short term and the noncurrent asset is more of an long term asset. The current assets have a direct affect on the profit that is to be made by the company and noncurrent assets are more investment based. However, both current and non-current assets are equally important for the company and account for total revenue generated for a company.

Order of liquidity

Order of liquidity is the presentation of assets in the balance sheet in the order of the amount of time it would usually take to convert them into cash. Thus, cash is always presented first, followed by marketable securities, then accounts receivable, then inventory, and then fixed assets. Goodwill is listed last
Order of liquidity to balance sheet
When it comes to the order of liquidity and how it applies to the balance sheet, cash is the most liquid item in a balance sheet and accountants for that reason put it at the top of the report. Cash equivalents, are considered the next most liquid items. It is common that cash and cash equivalents are very liquid because a company can convert them into cash or use them to pay for goods or services without difficulty.
Maketable security investments are short-term and are made from excess funds that you do not immediately need to conduct operations. Until you need these funds, they are invested to earn a return. You should make these
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