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.

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Chapter 5, Problem 5.6Q

To determine

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.

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