Assets

Assets are resources owned by a business that have economic value and can provide future benefits.

Explanation:
Assets can be tangible (like cash, inventory, or equipment) or intangible (like patents or trademarks). They are listed on the balance sheet and are classified as:

• Current assets: Expected to be used or converted into cash within one year (e.g., cash, accounts receivable)
• Non-current assets: Used over the long term (e.g., land, buildings, machinery)

Example:
If a business owns a delivery truck, that truck is an asset because it helps deliver products and generate income.

Importance:
Understanding assets helps measure a company’s financial strength and ability to generate revenue.

Common Confusion:
Assets are not the same as income. Income is earned; assets are owned.