Monetary Assets and non-monetary assets: Monetary assets are the assets whose value can be convertible easily into fixed amount of cash. Example: Cash, accounts receivable, investments. The asset which does not have fixed or stated cash value exchange is referred as non-monetary assets. However, this cash value depends on the economic conditions. Example: Property, plant and equipments, inventory. Monetary liabilities and non monetary liabilities: Monetary liabilities are the obligations that are payable in a fixed amount of money which does not fluctuate at the time of inflation or economic conditions. Example: Accounts payable Non-monetary liabilities are the obligations which are payable in terms of goods and services, but not in terms of money. Example: Deferred income. To explain: The difference between monetary and non-monetary assets and liabilities.
Monetary Assets and non-monetary assets: Monetary assets are the assets whose value can be convertible easily into fixed amount of cash. Example: Cash, accounts receivable, investments. The asset which does not have fixed or stated cash value exchange is referred as non-monetary assets. However, this cash value depends on the economic conditions. Example: Property, plant and equipments, inventory. Monetary liabilities and non monetary liabilities: Monetary liabilities are the obligations that are payable in a fixed amount of money which does not fluctuate at the time of inflation or economic conditions. Example: Accounts payable Non-monetary liabilities are the obligations which are payable in terms of goods and services, but not in terms of money. Example: Deferred income. To explain: The difference between monetary and non-monetary assets and liabilities.
Solution Summary: The author explains the difference between monetary and non-monetary assets and liabilities.
Monetary assets are the assets whose value can be convertible easily into fixed amount of cash. Example: Cash, accounts receivable, investments.
The asset which does not have fixed or stated cash value exchange is referred as non-monetary assets. However, this cash value depends on the economic conditions. Example: Property, plant and equipments, inventory.
Monetary liabilities and non monetary liabilities:
Monetary liabilities are the obligations that are payable in a fixed amount of money which does not fluctuate at the time of inflation or economic conditions. Example: Accounts payable
Non-monetary liabilities are the obligations which are payable in terms of goods and services, but not in terms of money. Example: Deferred income.
To explain: The difference between monetary and non-monetary assets and liabilities.
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning