Question

What are current assets? How are they shown on the balance sheet?

What are non-current assets? How are they shown on the balance sheet?

Answer 1

Answer

A current asset is any asset which can reasonably be expected to be sold, consumed, or exhausted through the normal operations of a business within the current year or operating cycle (whichever period is longer). Current assets include cash, cash equivalents, short-term investments (marketable securities), accounts receivable, inventory, supplies, and the portion of prepaid liabilities, sometimes referred to as prepaid expenses, which will be paid within a year. In simple words Assets which are held for a short period are known as current assets.

When you look at a company's balance sheet, you'll see the classic three categories, Assets, Liabilities and Owners' Equity. The first section listed under the asset section of the balance sheet is called Current Assets.

Current liabilities are referred as all liabilities of the business that are to be settled in cash within the year or the operating cycle of a given firm, whichever period is longer. Current liabilities includes short-term loans from banks, accounts payable balances, dividends and interest payable, bond maturity proceeds payable, consumer deposits, and reserves for taxes.

Current liabilities are shown in the balance sheet under stockholders equity and liabilities. It is reported after showing the non current liabilities.