Sunday, June 24, 2018

Current and Non-Current


There are two types of assets and liabilities, “current” and “non-current.”  Current assets are those that are expected to be converted to cash in one year or less, and current liabilities are those that will come due in one year or less.  So, cash, marketable securities, accounts receivable, and inventory are all considered current assets, while accounts payable and the principal amounts of loans due within a year are considered current liabilities.

Non-current assets and non-current liabilities are due or converted to cash in more than a year.  Fixed assets and intangible assets are considered non-current, and loan amounts which are due in more than a year are also considered non-current.

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