Word has gotten around that you know accounting and can explain it well.Jim, another of your friends has a unique business.During the summer he buys hats that cost $5.00 each and sells them at the beach for $12.00 each.Other than the cost of the hat, his only other expense last summer was $120 for parking.He sold 78 hats last summer.His accountant prepared a financial statement for him and he has several questions about the income statement.He asks:

1. I see these things called current assets and current liabilities.What are they?Why show them?I have current assets of $47,797.50 and current liabilities of $5,200.Is that good or bad?