ASSESMENT AND ACTIVITIES:

1) What is Current Assets and give examples?

Current assets are all assets that within one year a company expects to convert to
cash meaning it a short-term asset. They are widely used to determine a firm’s
liquidity. The assets of a company on its balance sheer or financial statements are
split into two classifications: current and non-current assets (long-term or capital
assets). For example, cash itself, cash equivalents, inventory, short-term
investments, accounts receivable, notes receivable, prepaid expenses and
marketable securities. As you can see these examples turn assets into cash in a
short period of time.

2) How Inventory Management works?

The mechanism by which you monitor your products across your entire supply
chain, from buying to manufacturing to end sales, is an inventory management
system (or inventory system). It regulated how you approach the management of
inventory for your company. Inventory management differs from business to
corporations and nature of its enterprise. Inventory systems inform you how many
parts or ingredients the finished product requires to be created or installed. You can
end up with excess stock without this detail, weakening your end result, or with
inadequate stock to satisfy customer demand.
There are two ways to manage inventory which is periodic inventory and
perpetual inventory. Periodic inventory usually last longer than perpetual inventory. It
usually takes a month or more than months while perpetual usually take 24 hours or
a day to transcribed inventory. Periodic inventory is a way of handling inventory that
depends solely on taking stock. In order to verify stock consistency, businesses with
a periodic method periodically count their stock every 3 to 6 months, checking if
stock levels match up to sales figures. While perpetual inventory is a method that
includes monitoring stock levels when items are received., processed, sold or
returned to the shop. Perpetual inventory systems aim to have the most up-to-date
inventory figures for precision, with less emphasis on stock takes.
 For example, Juan Dela Cruz have a convenience store he have a different
supplier of foods. In order to keep up the inventory he uses excel sheets to know the
number of stocks he have and when he will stack up again in order not to left empty
its shelf. Before a day he monitor the inventory and adjust the stocks in the excel
sheets. When the delivery came, he also adjust the inventory sheets. This way he
have a systematic way to have inventory of his products.
There are may ways to maximize and efficiently manage the company’s
inventory. Might be using software such as excel and the like, planning and such. This
varies from the type of the inventory and how company will efficiently take inventory to
have a systematic inventory.

3) What is Account Receivable and give examples?

The accounts receivable is any money owed to you by your clients for the goods
or services that they have brought from your corporation or business. Typically,
this money is collected later on maybe few weeks or month. This is transcribed
on the balance sheet of your enterprise as an asset. As part of accrual or
expenses and revenue, you use accounts receivable. This means you have
rendered the goods or services, but you do not have the income or profit from it.
You will receive it later on based on your agreement between your clients. For
example, you have rendered services to Juan Dela Cruz amounting to
P50,000.00 to be paid by him after a week. You will have account for Debit of
Accounts Receivable P50,000.00 then Credit of Revenue P50,000.00. If your
customer do not pay it will be taken as bad debt expense.