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Why is stock a current asset on the balance sheet and not a fixed asset?
Wiki User
∙ 14y ago
If you are talking about stock that the company in question has issued, then it is not an asset at all, but rather a component of owner's equity. However, shares of stock in other companies that have been purchased are in fact current assets.
The idea is that if a firms needs to make payments to suppliers, lenders, etc. they can sell stock and turn it to cash immediately. This is typically not the case with fixed assets.
Investments in stocks are highly liquid. Fixed assets are typically depreciated over time (except land) and are not expected to be sold within a year. While some stock investments might end up being longer than 1 year, it is advantageous for firms to classify them as current assets.
Financial analysts usually look at current assets to see how quickly a firm can meet its financial obligations. Lenders like to see firms with substantial current assets - this means that they are liquid.
Wiki User
∙ 14y ago
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Current asset
On a Balance sheet what does investment property represent is it fixed asset or investment?
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On a balance sheet what does contra asset allowance for doubtful accountsrepresent Is it current asset fixed asset or investment?
see the site. http://ccba.jsu.edu/accounting/BADDEBTS.HTML
Where does cash go on balance sheet?
Cash is an asset of business and it is shown under current asset of business at asset side of balance sheet.
Where does cash go on a balance sheet?
Cash is an asset of business and it is shown under current asset of business at asset side of balance sheet.
Is closing stock a balance sheet item?
Yes closing stock is balance sheet item and shown under current asset in asset side.
Is cash balance an asset or not?
Cash is a current asset of company and shown under current assets in balance sheet of company.
How do you Treat debtors in balance sheet?
Debtors is part of current asset and shown there in balance sheet.
Does accrued depriciation go in asset non current where you subtract?
Accumulated Depreciation is a contra-account, meaning it is shown as a negative, in the Fixed Asset section of the Balance Sheet.
Is it truth Merchandise inventory is classified as a current asset in a classified balance sheet?
Yes merchandise inventor is usable within one fiscal year that's why it is current asset and shown as a current asset in balance sheet.
What is difference between fixed asset and non current asset?
Current asset appears first in the balance sheet such as cash, accounts receivable and inventory. Fixed assets are those such as land, buildings, vehicles, furnitures, office equipments. In short, fixed assets are also known as non-current asset. It can also be known as capital assets or plant, property and equipment.
What is a vechile in balance sheet?
Vehicle is a fixed assets used in business for operations purpose so it is shown under fixed asset portion of balance sheet.
