Also advertising, property, heating, motor vehicles running costs etc. This is the entry on the right side of an account, money going out. This is the entry on the left hand side of an account, money coming into the business. Sum of cash bank balances bills receivable investments trade debtor stock and similar readily releasable assets. They indicate the level of liquidity and are linked at with current liabilities.
Liquidity are assets that can be sold and be turned back into money.
It is important to maintain an adequate level of liquidity to the current assets so that there is always the choice of turning assets back into cash. Cost price or current market value of investments appear on the balance sheet. The methods of valuation must be noted if the business were to be liquidated. This figure represents money owed to the business by customers who have purchased goods of services on credit. The business is very vulnerable if its owed large sums of money by one or two major customers, if they can't pay the business may fail.