The meaning of liquid assets, the concept of current assets

Current assets refer to the assets that can be realized or used by an enterprise within a business cycle of one year or more than one year, and are an indispensable part of enterprise assets.

First of all, it should be noted that the definition of current assets is based on the assumption of going concern accounting, because if the duration of a unit does not exceed one year, the definition of current assets and other assets may not be clearly distinguished. Generally speaking, current assets should be realized or used up in at least one year or one business cycle, even if this thing is not used up, such as low-value consumables, but in terms of accounting, it is necessary to amortize all its costs. The biggest difference between liquid assets and other assets is, of course, the difference in liquidity, or the difference in liquidity, and this difference is reflected in the length of time.

As a simple example, if a low-value consumable is purchased and left unused in the warehouse for 10 years, it does not mean that it is not a current asset. For example, the latest definition of fixed assets focuses on non-monetary assets with a useful life of more than 12 months, but if the value of the asset is low, then we can still classify it as current asset accounting!

In short, the definition and classification of accounting elements are closely related to accounting assumptions and accounting principles, and should be grasped flexibly, rather than absolutely dead. Have fun.

The definition of current assets is assets that are realized or consumed within a business cycle of one year or more than one year, can it be understood as: assets realized or consumed within one year, this statement is not accurate, for example, accounts receivable is current assets, but some accounts receivable have not been recovered for more than a year, then it is likely to produce losses, but this does not affect the attributes of its current assets, that is to say, short-term assets are mainly held and flowing, Due to objective reasons, there is no liquidity and does not affect its flow attributes, and the analogy can analyze non-current assets.

What does it mean to realize or consume assets in a business cycle of more than one year?

A business cycle is generally 1 year, the premise of China's accounting assumption is the accounting period, generally 1 year is an accounting cycle, but also a business cycle, rarely more than 1 year of business cycle. Assets that are older than one year are considered long-term assets.

Current assets are classified as current assets according to the state of assets on the balance sheet date, such as in the balance sheet, financial assets available for **, held-to-maturity investments are "non-current assets", and the "Accounting Standards for Business Enterprises Explanation 31: Financial Statement Presentation" stipulates that "assets that meet one of the following conditions shall be classified as current assets: (1) are expected to be realized, ** or consumed in a normal business cycle."

2) Held primarily for trading purposes. (3) It is expected to be realized within one year (including one year) from the balance sheet date.

4) Unrestricted cash or cash equivalents for the exchange of other assets or the liquidation of liabilities within one year from the balance sheet date. ”

Therefore, even if some bank wealth management products are classified as "held-to-maturity investment" or "available-to-maturity financial assets" by enterprises, if the maturity date of the wealth management product is less than one year, it should be reflected in the "non-current assets maturing within one year" item in the balance sheet, rather than "held-to-maturity investment"."or"Available for **Financial Assets" item.

The concept of current assets refers to the assets that can be realized or used by an enterprise within a business cycle of one year or more than one year, and are an indispensable part of enterprise assets. In the transition of circulation, current assets start from the form of money, change their form in turn, and finally return to the form of money (monetary funds, reserve funds, fixed funds, production funds, finished product funds, monetary funds), various forms of funds are closely combined with production and circulation, with fast turnover speed and strong liquidity.

Strengthening the audit of the current assets business is conducive to determining the legality and compliance of the current assets business, checking the correctness of the accounting treatment of the current assets business, exposing its shortcomings, and improving the efficiency of the use of the current assets.

Current assets refer to assets that can be realized or used by an enterprise within a business cycle of one year or more than one year, and are an indispensable part of enterprise assets.

In the transition of current assets, starting from the form of money, changing its form in turn, and finally returning to the form of money, various forms of funds are closely combined with production and circulation, with fast turnover speed and strong liquidity. That is, monetary funds, reserve funds, fixed funds, production funds, finished product funds, and monetary funds.

Current assets include monetary funds, short-term investments, notes receivable, accounts receivable and inventories. Due to the different characteristics of each project, it should be reviewed separately according to their different requirements. 1.

In terms of physical form, current assets are basically embodied in the material and liquid assets of various departments and residents.

Reserve. Including: (1) Current assets in a state of readiness for production and consumption refer to the means of production and consumer goods reserved by the consumption sector and residents in the production unit; (2) Current assets in the state of consignment.

It refers to the production department and the circulation department have not yet stocked the reserves of means of production and consumer goods, as well as the reserve materials stored by the state; (3) Current assets in the production process.

It refers to the work-in-process and semi-finished product reserves that are missing from the production unit. 2.According to the size of liquidity, it can be divided into liquid assets and non-liquid assets.

Including: (1) Liquid assets refer to liquid assets that can be realized in a short period of time, such as monetary funds, transactional financial assets and various receivables and prepayments. (2) Non-liquid assets include inventories, expenses to be amortized, non-current assets due within one year, and other current assets.

Current assets are assets and cash and cash equivalents that are expected to be realized, ** or expended during a normal business cycle or a fiscal year. Common current assets include cash in hand, bank deposits, trading financial assets, receivables and advances, inventories, etc.

Circulating asets are highly liquid assets, also known as floating assets or operating assets, such as cash, semi-finished products, and inventories that are expected to be consumed or replaced by similar assets during a business cycle.

Current assets are the opposite of fixed assets, and generally real estate is called fixed assets, such as plant and equipment. Liquid assets are constantly changing in actual operations, for example, if you want to use a part of the money to buy raw materials, and then after production, sales will be transferred back to your hands, then it is a liquid asset.

Current assets are relative to fixed assets, and generally real estate is called fixed assets, such as houses and equipment. Liquid assets are constantly changing in actual operations, for example, if you have 1,000 yuan, and all the materials you buy tomorrow are used, then this 1,000 yuan will flow into the hands of others and become other people's assets, like this is called liquid assets.

Current assets refer to the assets that can be realized or used by an enterprise within a business cycle of one year or more than one year, and are an indispensable part of enterprise assets. Current assets include monetary funds, short-term investments, notes receivable, accounts receivable and inventories.

Characteristics of Liquid Assets:

1. The occupation form of current assets is changeable;

2. The amount of current assets occupied is volatile;

3. The cycle of current assets is consistent with the production and operation cycle;

4. The current assets are flexible and diverse.

Classification of current assets:

1) According to the role of current assets in the production and operation of enterprises.

1. The current assets of industrial enterprises can be divided into:

1) Reserve assets: current assets in the production preparation stage from purchase to production, including raw materials and main materials, auxiliary materials, fuel, spare parts for repair, low-value consumables, packaging materials, purchased semi-finished products, etc.;

2) Production assets: current assets in the production process from input to finished products made into storage, including products, self-made semi-finished products, pending amortization, etc.;

3) Finished product assets: current assets in the process of waiting for sale from product warehousing to product sales, including finished products and semi-finished products and parts ready for sale;

4) Settlement assets: refers to all kinds of issued commodities, accounts receivable, notes receivable, etc.;

5) Monetary assets: bank deposits, cash in hand, etc.

2. The current assets of commercial enterprises can be divided into:

1) Commodity assets: including inventory goods and goods in transit, etc.;

2) Non-commodity assets: including packaging, materials and supplies, low-value consumables, and beach expenses;

3) Settlement assets: including various receivables, advance payments, notes receivable, etc.;

4) Monetary assets: including bank deposits, cash in hand, etc.

The composition of the same type of current assets in industrial enterprises and commercial enterprises is very different, and the proportion of commercial enterprises is much higher than that of industrial enterprises.

2) According to the manifestation of current assets: it can be divided into monetary current assets and current assets in physical form. Monetary liquid assets exist in the form of money, including the above-mentioned settlement assets and monetary assets; Current assets in physical form include the above-mentioned reserve assets, production assets, finished product assets, etc., which are the focus of the verification of current assets.

3) According to the needs of plan management of current assets: it can be divided into fixed current assets and non-fixed current assets. Quota current assets are the basic components of current assets, including raw materials, auxiliary materials, work-in-progress, self-made semi-finished products, finished products, etc.; Non-fixed current assets include settlement assets and monetary funds.

Current assets refer to the assets realized or consumed by an enterprise within one year or more of a business cycle, including cash in hand, various bank deposits and other monetary funds, short-term investments, receivables and prepayments, inventories and other current assets. Its characteristics: 1. Fast turnover speed 2. Strong liquidity 3. Diversified forms of assets that can be realized or used by enterprises in a business cycle of one year or more than one year are an indispensable part of enterprise assets.

Current assets include monetary funds, short-term investments, notes receivable, dividends receivable, accounts receivable, other receivables, inventories, long-term debt investments due within one year, and other working capital.

In terms of physical form, current assets can be divided into those in the state of preparation for production and consumption, and those in the state of being sold and in the process of production. In terms of liquidity, current assets can be divided into liquid assets and non-liquid assets.