Bookkeeping

Accounts receivable represents goods or services that have already been sold and will typically be paid/collected within thirty to forty-five days. Inventory is less liquid than accounts receivable because the product must first be sold before it generates cash...

Cheesy Chuck’s has only two assets, and one of the assets, Equipment, is a noncurrent asset, so the value of current assets is the cash amount of $6,200. Since this amount is over $0 (it is well over $0 in this case), Chuck is confident he has nothing to worry about...