What is the difference between a current asset and a long‐term asset? Why is cash typically...
- What is the difference between a current asset and a long‐term asset? Why is cash typically listed first on a balance sheet?
- List and explain the major items found on an income statement.
- What is accrual accounting? Give an example of how accrual accounting affects a company's financial statement.
- List the four categories of financial ratios and give an example of each. What is the purpose of ratio analysis?
- What is a cash budget? Briefly outline what a simple cash budget might look like.
Homework Answers
Hi
As per the policy we will solve only first question here.
Current asset is an asset which can be converted into cash in less than a year. Example of current asset are "Account Receivable" and T bill.
Long term assets are assets which gets converted into cash in more than a year. Example of long term asset is 'Property' and bonds.
Cash is most liquid current asset. It is listed under current asset on a balance sheet.
Thanks
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