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Current assets, comprehensive income, personal allowances

How are current assets defined and list 6 examples of Current Assets? What decides the length of a company's operating cycle?

What is Comprehensive Income and provide a Journal Entry example to record comprehensive Income? How is it reported?

Briefly explain the difference between personal allowances calculated using the "Personal Allowances Worksheet" on Form W-4 and the personal exemption allowance deducted on an individual's Form 1040. Why do these differ?

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How are current assets defined and list 6 examples of Current Assets?

Current assets are those which are expected to turn into cash within 12 months, and they are the assets that fund day to day business operations.

Types of accounts include:
Cash
Time certificates of deposit
Marketable equity securities
Accounts receivable
Inventory
Prepaid insurance

What decides the length of a company's operating cycle?

The operating cycle is defined as the length of time between purchasing goods, producing goods, selling goods, collecting cash. In essence it is the cycle that begins with spending cash and ends with receiving cash. The operating cycle is determined by the type of business, but certain operating policies can change the length of the cycle.

Examples:
1. If a company will only accept credit cards or cash, the cycle will be shortened.
2. If a company uses just-in-time (JIT) for inventory purchases, the cycle will be shortened
3. If a company's credit policies are too lax, the cycle will be lengthened.

What is Comprehensive Income and provide a Journal Entry example to record ...

Solution Summary

The 732 word solution provides good explanations of the terms listed in the problem. The explanations includes examples, as needed, to demonstrate the concepts of current assets, operating cycle, comprehensive income, and personal allowances.

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