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QUESTION 6 Define the following terms a. Current assets b. Non current assets c. Current liabilities...

QUESTION 6 Define the following terms

a. Current assets

b. Non current assets

c. Current liabilities

d. Non current liabilities

e. Share capital

Solutions

Expert Solution

a. Current assets- Current assets are all assets that can be converted into cash within one year. It is help to measure the liquidity of a company. Current assets are on assets side of balance sheet.

Following are some current assets-

Cash and cash equivalents

Accounts receivable

Inventory.

b. Non current assets- Non-current assets are assets whose value not be realized within a one year. The assets are recorded on the balance sheet.

Following are some non-current assets-

property

plant and equipment

intellectual property

land and building.

c. Current liabilities- Current liabilities are obligation to be paid in one year. These are given on balance sheet liabilities side.

Following are some current liabilities-

Accounts payable

Short term loans

Bank overdraft.

d. Non current liabilities- These are to be paid after one year. These are mentioned on liabilities side of balance sheet.

Following are some non current liabilities-

Long term loans and advances

Deferred revenue

Bonds payable.

e. Share capital- It means amount invested by company shareholders for use in business. This mentioned on liability side of balance sheet.

Following are the some of share capital -

Common stock

Preferred stock.

ekkarill92 answered 1 year ago

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