The Term “Current Asset” does not Include? (A) Cash (B) Stock-in-trade (C) Furniture (D) Advance payment
By BYJU'S Exam Prep
Updated on: November 14th, 2023
Furniture is not included in the current assets. A business’s asset that may be quickly sold or used to generate liquid cash is known as a current asset. A company’s ability to use the money daily and pay current business expenses makes a current asset a significant feature. Trade and other receivables, inventories, cash and cash equivalents, and short-term investments are the key elements of current assets.
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Types of Current Assets
Assets generated during normal business operations and change with each transaction are known as current assets. Examples include a variety of debtors, inventory, accounts receivable, cash on hand, cash in the bank, etc. Fixed assets, including the land, fixtures, vehicles, machinery, and vehicles, are not included in current assets.
Clear recurring payments and debts can be made using current assets. It provides information on how much cash and liquid assets the company has. They are assets that the business needs to conduct business operations and are anticipated to generate financial gains for more than one accounting year.
- Inventory
- Cash and cash equivalent
- Ongoing projects
- Pre-paid expenses
- Account receivable
- Marketable securities
Furthermore, it is crucial to have a Current Assets account for any company as it displays short-term liquidity and the ability to pay the obligations for short-term goals. Hence, the Current assets account is typically the first account listed in the balance sheet for any company. Besides, learning about the company’s current assets is significant for current and future investors.
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