Current Asset
Cash or others assets expected to be converted to cash with in one year.

Current Assets
 Cash  Marketable securities  Accounts receivables  Inventories  Prepaid

Cash
Currency or coins on hand, bank balances, and negotiable money orders and checks.

Marketable securities
Ownership and debt instruments of the government and other companies that can be readily converted into cash

Account Receivables
Claims arising from the selling of merchandise or services on account to customers are referred to as trade receivables

Inventories
The balance of goods on hand

Prepaid
An expenditure made in advance of the use of the service or goods

Current liabilities
Obligation whose liquidation is reasonably expected to acquires the use of existing resources properly classifiable as current assets or the creation of other current liabilities

Current Liabilities
 Account Payable  Accrued Liability  Income Tax

Account Payable
An accounting entry that represents an entity’s obligation to pay off a short term debt to its creditor. The accounts payable entry is found on balance sheet under the heading current liabilities

Accrued liability
An accounting term for an expense that a business has incurred but has not yet paid

Income Tax
A tax that government imposed on financial income generated by all entities with in their jurisdiction

Short Term Ratio
 Working Capital  Current Ratio  Acid Test Ratio  Cash Ratio

Working Capital

The excess of current assets over current liabilities Working Capital = Current Assets − Current Liabilities

Question
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 Second level  Third level  Fourth level  Fifth level

Current Ratio

A liquidity ratio that measures a company’s ability to pay short term obligation

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 Second