What is Assets and Its Types in Accounting

What is Assets

In this post you will come to know that what actually assets is, so keep reading this post carefully and do ask question on comment section below this post and also share this topic with your classmates, colleagues.

Formal Definition of Assets

The properties used in the operation or investment activities of business.

Informal Definition of Assets

All the valuable good stuff a business has.

Additional Explanation of Assets

The good stuff includes tangible and intangible stuff, which are explained below:

Tangible Asset or Goods

Tangible goods can be seen physically and be touched such as equipment, vehicles, and buildings.  Examples of tangible assets that many individuals have are cars, houses, boats, furniture, Tv’s, and appliances. Some examples of business type assets are cash, accounts receivable, notes receivable, inventory, land, and equipment.

Intangible Asset or Goods

Intangible Good stuff can neither be seen physically nor be touched such as pieces of paper (sales invoices) representing loans to your customers where they promise to pay you later for your services or product. Example of Intangible Assets are licenses, computer software, patents, trademarks, films, copyrights, and import quotes.

Types of Assets

Cash-Monetary items which offers to meet current obligations of the business. It may include following:

• Bank Deposits
• Currency & coins
• Cheques
• Money Orders
• Traveler’s Cheque.

You May Also Read: Terminology of Accounting and Bookkeeping Records

Account Receivable Businesses claim from the sales of goods and services against the property of a customer on account.

Notes Receivable Formal written promises given by customers or others to pay definite sums of money to the business at specified times.

Inventory-Expenditures for items held for resale in the normal course of a business’s operations.

Office Supplies-Expenditures for maintaining a supply of on hand supplies such as typewriter, copier, and computer paper, pens, pencils, and special forms.

Land-Expenditures for parcels of the earth. It includes Plaza, Shops, and parking areas.

Equipment-Expenditures are physical goods used in a businesses, for instance machinery and furniture. Equipment is used in a business during the production of income.

Furniture includes items needed in a business such as tables, desks, chairs, and cabinets.