D. Distinguish between current and non-current assets, and current and non-current liabilitites

Question 1

Current Assets

Answer 1

Cash and other assets converted to cash in less than 1 year or the operating cycle

Operating cycle - Inventory>sales>cash

Presented in order of liquidity

Reveal info about the operating activities of the firm

Question 2

Current Liabilities

Answer 2

Obligations to be satisfied within one year or op cycle

Held primarily for trading purposes
There is not an unconditional right to defer settlement for more than one year

Question 3

Noncurrent Assets

Answer 3

Not converted to cash or used up within one year or operating cycle

Noncurrent assets provide information about the firms investing activities

Question 4

What forms the foundation upon which a firm operates?

Answer 4

Investing activities

Where to find info? Non current assets

Question 5

Noncurrent liabilities

Answer 5

Provide info about the firms long term financing activities