company abc
Current Assets - answerCash and other resources that are expected to turn to cash or
to be used up within one year of the
balance sheet date. (If a company's operating cycle is longer than one year, an item is a
current asset if it
will turn to cash or be used up within the operating cycle.) Current assets are presented
in the order of
liquidity, i.e., cash, temporary investments, accounts receivable, inventory, supplies,
prepaid insurance.
Cash & Equivalents - answerA balance sheet heading or grouping that includes both
cash and those marketable assets that are very
close to their maturity dates.
Short Term Investments - answerA short-term investment (STIF) is a type of investment
fund which invests in money market investments of high quality and low risk. They are
commonly
Account Receivables - answerA current asset resulting from selling goods or services
on credit (on account). Invoice terms such as (a)
net 30 days or (b) 2/10, n/30 signify that a sale was made on account and was not a
cash sale.
Inventories - answerA current asset whose ending balance should report the cost of a
merchandiser's products awaiting to be
sold. The inventory of a manufacturer should report the cost of its raw materials, work-
in-process, and
finished goods. The cost of inventory should include all costs necessary to acquire the
items and to get
them ready for sale.
When inventory items are acquired or produced at varying costs, the company will need
to make an
assumption on how to flow the changing costs. See cost flow assumptions.
If the cost to replace inventory is less than the actual cost of the inventory, it may be
necessary to reduce
the inventory amount. See lower of cost or market.
To learn more, see Explanation of Inventory and Cost of Goods Sold.
Pre-Paid Expenses - answerA current asset representing amounts paid in advance for
future expenses. As the expenses are used or
expire, expense is increased and prepaid expense is decreased.
Current Assets - answerCash and other resources that are expected to turn to cash or
to be used up within one year of the
balance sheet date. (If a company's operating cycle is longer than one year, an item is a
current asset if it
will turn to cash or be used up within the operating cycle.) Current assets are presented
in the order of
liquidity, i.e., cash, temporary investments, accounts receivable, inventory, supplies,
prepaid insurance.
Cash & Equivalents - answerA balance sheet heading or grouping that includes both
cash and those marketable assets that are very
close to their maturity dates.
Short Term Investments - answerA short-term investment (STIF) is a type of investment
fund which invests in money market investments of high quality and low risk. They are
commonly
Account Receivables - answerA current asset resulting from selling goods or services
on credit (on account). Invoice terms such as (a)
net 30 days or (b) 2/10, n/30 signify that a sale was made on account and was not a
cash sale.
Inventories - answerA current asset whose ending balance should report the cost of a
merchandiser's products awaiting to be
sold. The inventory of a manufacturer should report the cost of its raw materials, work-
in-process, and
finished goods. The cost of inventory should include all costs necessary to acquire the
items and to get
them ready for sale.
When inventory items are acquired or produced at varying costs, the company will need
to make an
assumption on how to flow the changing costs. See cost flow assumptions.
If the cost to replace inventory is less than the actual cost of the inventory, it may be
necessary to reduce
the inventory amount. See lower of cost or market.
To learn more, see Explanation of Inventory and Cost of Goods Sold.
Pre-Paid Expenses - answerA current asset representing amounts paid in advance for
future expenses. As the expenses are used or
expire, expense is increased and prepaid expense is decreased.
