Current Assets

Prepaid Expense

A current asset representing amounts paid in advance for future expenses. As the expenses are used or expire, expense is increased and prepaid expense is decreased.

Accounts Receivable

Accounts receivable is the amount owed to a company resulting from the company providing goods and/or services on credit. The term trade receivable is also used in place of accounts receivable.

Accounts Receivable From Affiliates

Affiliate refers to the fact that parent company has an ownership stake less than 50 percent in the business. Accounts receivable from affiliates in turn refers to the amount owed to the company for providing goods and/or services to its parent on credit.

Current Assets

Cash and other assets whose economic value is to be reasonably consumed within an operating cycle or within a year.

Cash vs Restricted Cash

Cash can be used for any purpose whereas restricted cash refers to cash that is being held onto by the company for a specific reason (usually explained in an accompanying footnote).

Current Asset Examples

Cash, marketable securities, accounts receivable, inventory, prepaid expenses, etc.

Marketable Securities

Marketable equity securities can be either common stock or preferred stock. They are equity securities of a public company held by another corporation and are listed in the balance sheet of the holding company. If the stock is expected to be liquidated or traded within one year, the holding company will list it as a current asset. Conversely, if the company expects to hold the stock for longer than one year, it will list the equity as a non-current asset. All marketable equity securities, both current and non-current, are listed at the lower value of cost or market (also include bonds and other securities).

Allowance For Doubtful Accounts

The Allowance for Doubtful Accounts is a balance sheet contra asset account that reduces the reported amount of accounts receivable. The use of this allowance account will result in a more realistic picture of the amount of the accounts receivable that will be turning to cash, since some customers may not pay the full amount owed to the company.