How are current assets different from non-current assets

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Reference no: EM132688054

Here are a series of journal entries. Prepare a trial balance:

Cash

Common Stock 30,000

Equipment

Cash 12,000

Supplies

Accounts Payable 5,000

Cash

Service Revenue 6,000

Rent Expense

Cash 4,000

Rent Expense

Prepaid Rent 9,000

Supplies Expense

Supplies 2,700

Cash

Unearned Revenue 18,000

Unearned Revenue

Revenue 6,000

Depreciation. Expense

Accumulated Depreciation 5,000

Totals $ 97,700

Question 1) How are current assets different from non-current assets? How are current liabilities different from non-current liabilities? What differentiates an account receivable vs. an accounts payable?

Question 2) What does the current ratio measure? Is the higher the ratio always the better? Explain.

Question 3) What does solvency mean? What data does the balance provide in order to determine solvency?

Question 4) Cash and cash equivalents are the most liquid assets included on a company's balance sheet. So what gets counted as cash? What is a cash equivalent?

Reference no: EM132688054

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