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Internal Controls, Assets & Cash

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1- What is a current asset? What is a non-current asset? What is the difference between the two types of assets? In which financial statement would you find these assets?

2- What are internal controls? Why do companies need them? What are some examples of internal controls? Who is responsible for developing internal controls?

3. Could please explain to me the controls required for "cash"? Why are they important?

4. Please Identify the Principles of Internal Control? Are there are six or seven

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Internal Controls, Assets & Cash

Assets

Assets are the economic resources of an enterprise that can be usefully expressed in monetary terms. These are the items of value, used for the operations of the business enterprise and also include the amount due to it from others. Some of the examples of assets are money owing by the debtors, stock of goods, cash, furniture, machines, building, etc.

Assets = Capital + Liabilities

Current assets

Current assets are those resources of a firm which are either held in the form of cash or are expected to be converted into cash within the accounting period or the operating cycle of the business. Normally, the accounting period adopted by the companies is one year. The operating cycle is the time taken to convert the raw materials into finished goods, sell finished goods and convert receivables into cash. Current assets include cash, tradable securities, debtors and stock of raw material, work-in-process and finished goods (Eisen, 2000).

Non-current assets

Non-current assets are those resources of a firm which are not expected to be converted into cash within one year. These can also be called as non current assets which are purchased to run the daily operations of the business. Non-current assets are risky due to their late convertible features but they are more profitable for a firm. Examples of non-current assets are long-term assets, land & building, plant & machinery, etc. (Eisen, 2000).

Difference between current & non-current assets

The essential difference between the current assets and ...

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Ashish Sharma, MBA (IP)
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  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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