What is a current asset? What is a noncurrent asset? What is the difference between - 9730

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1. What is a current asset? What is a noncurrent asset? What is the difference between the two types of assets? In which financial statement would you find these assets?

 

2. What is an example of a significant accounting estimate? What is the importance of these estimates? How do ethics play into the decision-making process? Which financial statements include significant accounting estimates? Why ?

 

3. What are internal controls? Why do companies need them? What are some examples of internal controls? Who is responsible for developing internal controls?

 

Solution Description

1. What is a current asset? What is a noncurrent asset? What is the difference between the two types of assets? In which financial statement would you find these assets?

A current asset includes assets that are expected to be sold within one year in the usual course of business. Examples are inventory, cash, accounts receivable and prepaid expenses. (http://www.investopedia.com/terms/c/currentassets.asp)

Non-current assets are those assets that are not sold in the normal course of business and will not be realized in one accounting year. These are capitalized instead of being expensed. The