会计英语unit 6 Assets—Current Assets Ⅰ.ppt

Unit 6 Assets—Current Assets Ⅰ Ⅰ. Definition of Current Assets Ⅱ. Current Assets Accounts Assets Definition: Assets are economic resources that are measurable in monetary terms and owned or controlled by an enterprise for the purpose of making profits. Recognition condition: An asset is recognized on the balance sheet when ①it is probable that the future economic benefits will flow to the enterprise and ②the asset has a cost or value that can be reliably measured. Ⅰ. Definition of Current Assets Current assets are assets that are expected to be converted to cash, sold or consumed within 12 months or within the business’s normal operating cycle if longer than a year. Current assets on the balance sheet represent a companys liquidity. The more cash and short-term investments on hand, the lower a firms risk of failure because management can use the money to carry itself through tough periods. Ⅱ. Current Assets Accounts 1.Assets 101 Cash 102 Accounts Receivable 103 Notes Receivable 104 Office Supplies 105 Equipment 106 Inventory 107 Prepaid Insurance 108 Land 109 Accumulated Depreciation 110Intangible Assets 1. Cash Content Cash includes coins, paper money, checks, money orders, and money in deposit. Cash and Cash Equivalents Cash and Cash Equivalents is the amount of money the company has in bank accounts, savings bonds, certificates of deposit, and money market funds. It tells you how much money is available to the business immediately. Example Cingular company conducted the following transactions: (1)Invested $500,000 in the business. (2)Purchased supplies and equipment for $100,000. (3)Performed service for state Corporation and received $20,000 a month later. Solution (1) Dr. Cash 500,000 Cr. Paid-in Capital 500,000 (2) Dr. Supplies and Equipment 100,000 Cr. Cash 100,000 (3) Dr. Accounts Receivable 20,000