- Current Assets: Those assets which are easily convertible into cash with in a year are
Called current assets. Such assets are easily converted into cash during an accounting
Period of a firm. These assets are also called floating assets or circulating assets. Cash
In hand, cash at bank, bills receivable, sundry debtors, accrued income etc. are the
Examples of current assets.
- Current Liabilities: The liabilities of a firm may be fixed or current. The liabilities which
Should be repaid by the firm within one accounting period are called current liabilities.
Such liabilities are payable by the firm within short period of time generally one year.
Sundry creditors, bills payable, account payable, bank overdraft, outstanding expenses,
Advance income etc are some examples of current liabilities.