The distinction between current and non-current items:
- Current assets or liabilities are involved in the operating cycle.
- Current assets or liabilities are realized/settled within 12 months.
- Current items are primarily for trading.
- Current items are cash or cash equivalent.
Current Assets are the items that are tangible and can quickly be converted to cash or that will be sold within 12months.Ex- Stock, Debtors, Cash in Hand, Cash at Bank, etc
Current Liabilities – Items/dues/liabilities expected to be pay within 1years. It’s a financial obligation need to discharge within 1year only. Ex- Accounts Payable, Bank overdraft, Creditors, etc
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