Question

define assets and give three examples.

Answer 1

Asset- Asset shows the ownership on a property, building, furniture, cash etc. Assets are owned by business that can be sold to repay the loan or at the time of liquidation. Assets are shown in the balance sheet. There are two kinds of assets:

Tangible- Assets that can be seen and touched. Example: Building, furniture, machinery etc.

Intangible- Assets that cannot be seen or touched but can be felt. Example: Goodwill, Patent, Trade mark.

Types of Assets- There are mainly two types of assets:

Fixed (Non-Current) Assets- Assets those cannot be easily converted into cash and require huge one time investment to buy or set up, are called fixed assets. These are also called "Long term assets"

Examples: Land & Building, Machinery and Furniture & Fixtures

Current Assets- Assets that can be easily converted into cash. These are also called "Short tern assets".

Examples: Cash, Marketable securities, Account receivables.