Total current assets definition
/Total current assets is the aggregate amount of all cash, receivables, prepaid expenses, and inventory on an organization's balance sheet. These assets are classified as current assets if there is an expectation that they will be converted into cash within one year. A sample presentation of total current assets in a balance sheet appears in the following exhibit.
The total amount of current assets is frequently compared to total current liabilities, to see if there are sufficient assets available to pay for the obligations of a business.
FAQs
How do estimates affect total current assets?
Estimates affect total current assets by adjusting the reported amounts of assets to reflect expected realizable values. Common examples include allowances for doubtful accounts, inventory obsolescence reserves, and prepaid expense amortization estimates. Changes in these estimates can materially increase or decrease reported current assets and liquidity measures.