What is not considered 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. In other words, an asset whose estimated lifespan is one year or less can be said to fall under the definition of current assets. Trade and other receivables, Inventories, Cash and cash equivalents, and short-term investments are the key elements of 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. Investors and creditors carefully examine the company's current assets to comprehend the risks and potential rewards of the business. These are some of the uses of Current Assets. The balance sheet's current asset for a corporation can be computed as follows.

Cash + Cash Equivalents + Inventory + Accounts Receivable + Market Securities + Prepaid Expenses + Other Liquid Assets

While Fixed assets are long-term tangible assets that businesses employ to make money. Due to their long usable lives, fixed assets bring the company long-term financial gain. Property, Plant, and Equipment, which appear as a line item on the balance sheet, designates fixed assets, also referred to as capital assets. Fixed assets are difficult to turn into cash. The word "fixed asset" refers to tangible long-term assets such as real estate, buildings, fixtures, machinery, and furniture. Furniture is not considered a "current asset," as a result.

Types of Current Assets

• Cash and cash equivalent
• Inventory
• Ongoing projects
• Pre-paid expenses
• Account receivable
• Marketable securities