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Classifying assets/liabilities as either current or noncurrent
Need help identifying six items that under different circumstances could be classified as either current or noncurrent, and what factors would determine this. Can anyone out there help?:confused:
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The difference between Current and Noncurrent is the time frame. If you have a loan that is less than 1 year or operating cycle it is a current liabilitiy. Over 1 year or operating cycle it is a Noncurrent Liability. If it is over 1 year or operating cylce, the current portion of long-term debt will be the portion that is due within 1 year or operating cycle. The same holds true for Current and NonCurrent Assets. If you have a Notes receivable that is over 1 year or operating cycle, then the portion that is due within 1 year or operating cycle is a Current Asset, the rest is a NonCurrent Asset. Current Assets are assets that are expected to be turned into Cash within 1 year or operating cycle. |
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Difference between current and non-current liability:
Current liabilities are those debts, which are due and payable within 1 year. Non-Current Liabilities are those which fall due in more than 1 Year. The portion payable within 1 year is current. The portion payable within 1 year is current while the remaining proton payable from year 2 to 5 is non-current. Current Liabilities are any liabilities that you owe and you can reasonably pay off in one-year or less (or one accounting cycle)Non-Current (aka Long-Term) Liabilities are liabilities that you cannot or do not expect to pay off in one year (accounting cycle), such as a Long Term Mortgage or Truck Note for examples. Current liabilities would be things like Corporation tax, VAT, payroll taxes, trade creditors (accounts payable).Non current liabilities could be things like long-term loans, long-term debentures, and hire purchase schemes. Current liabilities are a balance sheet item that reflects the total sum of all money owed and due by a company within one year. For example, accounts payable and short-term loans fall into this category.Non current liabilities are also found on the balance sheet and reflect debts that are not required to be satisfied in the within 12 months. These are long-term debts like bonds. |
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