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Accounting For Fun and Profit by Lawrence A. Weiss

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CHAPTER 5

Current Assets

Chapters 5 through 10 can be thought of as a walk down the Balance Sheet. They will delve into the terms and techniques presented on the Balance Sheet and Income Statement.

Assets, as noted in Chapter 3, are resources that a firm owns or controls. Current assets are those the firm will turn into cash or use within 1 year (i.e., get paid by customers, sell inventory, expire prepaid insurance, and so on). Let us start with the first-listed asset on the Balance Sheet: cash.1

Cash

Apple, Alphabet (Google), Microsoft, and Exxon are the four largest U.S. (and world) public firms and have lots of cash.2 According to their Balance Sheets, the firms’ cash hoards (including cash, cash equivalents, and marketable securities that ...

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