Finance Formulas / July 19, 2018 / Alia Marquez
A current asset is cash and any other company asset that will be turning to cash within one year from the date shown in the heading of the company's balance sheet. If a company has an operating cycle that is longer than one year, an asset that will turn to cash within the length of its operating cycle is considered to be a current asset.
The accounting equation is sometimes referred to as the "basic accounting equation" or balance sheet equation could also be written as Shareholders' Equity = Assets – Liabilities, where the statement is rearranged to reflect the residual claim of equity owners. Alternatively, one can rearrange the accounting statement and the results of the equation will still hold if done properly.
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