Accounting Demystified

Chapter 5. Assets

Assets can be thought of as the things you own, the things you have rights to, and expenses that have been paid for and have not yet been used up. The things a company owns include cash, investments, inventory, land, buildings, equipment, vehicles, furniture, and fixtures. Assets that represent items the company has rights to include licenses, trademarks, copyrights, and franchises. An asset that represents an expense that has been paid for and not yet used up is a prepaid expense.

Assets are often divided into current and noncurrent (sometimes called long-term). Current assets are those assets that are expected to be turned into cash or used up within the next twelve months. Typical current assets are Cash, Accounts receivable, ...