Today's afternoon, we have discuss Current Assets Account Title and I found out that there are ten (10) Assets that are under to Current Assets Account Title. The Cash, Petty Cash Fund, Cash Equivalents, Notes Receivale, Accounts Receivable, Estimated Uncollectible Accounts, Accrued Income, Advances to Employees, Inventories, Prepaid Expenses and Unused Supplies.
Let me to define each account title for you to understand them too.
Cash - this account title describe about the money, either in paper or in coines and money substitute like check, postal money orders, bank drafts and treasury warrants. When cash is within the premise of the business, the account title is Cash on Hand and Cash in Bank if deposited in the bank.
Petty Cash Fund - another account title for money placed and set aside for petty or small expenses. This exists when business used in imprest system of keeping cash.
Cash Equivalents - highly liquid instruments that are readily convertible into cast and they present insignificant risk of changes in values because of changes in interest rates.
Notes Receivable - is a promissory note that is received by the business from the customer arising from rendering of services, sale of merchandise, etc.
Accounts Receivable - account title for collectible arising services rendered to a customer or client on credit or sale of goods to customers on accounts. This constitutes an oral or verbal promise to pay by a customer or client.
Estimated Uncollectible Accounts - a contra-asset account. It provides possible losses from collectible accounts. It is classified as such because it is shown as a deduction from the Account Receivable which is a Current Asset Account.
Accrued Income - the amount of income earned but not yet collected.
Advances to Employees - account title for amounts collectible from employees for allowing them to make cash advances which are deductible against their salaries or wages.
Inventories - are assets which are (1) held or sale in the ordinary course of business; (2) in the process of production for such sales; or (3) in the form of materials or supplies to be consumed in the production process or in the rendering services.
Prepaid Expenses - account title for expenses that are paid in advance but are not yet incurred or have not yet expired such as Prepaid Rental, Prepaid Insurance, Prepaid Interest, Prepaid Advertising, etc.
Unused Supplies - an account title for cost of stationery and other supplies purchased for use but are left on hand and still unused.
And finally, those are the defination of each account title. It is will be your references to create a T-Account following soon.
