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1、Unit6Assets—CurrentAssetsⅠⅠ.DefinitionofCurrentAssetsⅡ.CurrentAssetsAccountsAssetsDefinition:Assetsareeconomicresourcesthataremeasurableinmonetarytermsandownedorcontrolledbyanenterpriseforthepurposeofmakingprofits.Recognitioncondition:Anassetisrecognizedont
2、hebalancesheetwhen①itisprobablethatthefutureeconomicbenefitswillflowtotheenterpriseand②theassethasacostorvaluethatcanbereliablymeasured.2Ⅰ.DefinitionofCurrentAssetsCurrentassetsareassetsthatareexpectedtobeconvertedtocash,soldorconsumedwithin12monthsorwithin
3、thebusiness’snormaloperatingcycleiflongerthanayear.Currentassetsshouldincludecash,short-terminvestment,receivable,prepaymentandinventory.3Currentassetsonthebalancesheetrepresentacompany'sliquidity.Themorecashandshort-terminvestmentsonhand,thelowerafirm'sris
4、koffailurebecausemanagementcanusethemoneytocarryitselfthroughtoughperiods.4Ⅱ.CurrentAssetsAccounts1.Assets101Cash102AccountsReceivable103NotesReceivable104OfficeSupplies105Equipment106Inventory107PrepaidInsurance108Land109AccumulatedDepreciation110Intangibl
5、eAssets51.CashContentCashincludescoins,papermoney,checks,moneyorders,andmoneyindeposit.PlaceOnbalancesheet,cashislistedfirstamongthecurrentassets,becauseitisthemostcurrentandliquidofallassets.AmountCashandcashequivalentsareaccountedforaccordingtotheactualam
6、ountofreceiptandpayment.6CashandCashEquivalentsCashandCashEquivalentsistheamountofmoneythecompanyhasinbankaccounts,savingsbonds,certificatesofdeposit,andmoneymarketfunds.Ittellsyouhowmuchmoneyisavailabletothebusinessimmediately.7Cashisavitalfactorintheopera
7、tionoabusiness,sincemanybusinesstransactioninvolvecash.Cashismostsubjecttotheftandfraud.So,strictcontrolovercashshouldbeappliedinabusiness.Therearesomecaseswherecashonthebalancesheetisn'tnecessarilyagoodthing.Themoral:Youprobablywon'tbeabletotellifacompanyi
8、sweakbasedoncashalone;theamountofdebtisfarmoreimportant.8ExampleCingularcompanyconductedthefollowingtransactions:(1)Invested$500,000inthebusiness.(2)Purchasedsuppliesandequipmentfor$100,000.(3)Performe
