What are Assets?
An asset is defined as anything of value or a resource of value that has the potential to be transformed into cash. It may create money for a business, or the business may benefit from holding or utilizing the item, depending on the circumstances. There are two main types of assets, fixed and non-fixed. Non-fixed assets are assets that can be converted into cash within a year, such as inventory or accounts receivable, whereas fixed assets are those acquired for the long-term benefit of the business. Fixed assets are tangible assets that you own and use only to produce or sell goods and services to customers. Fixed assets are subject to depreciation. Examples of tangible assets include cash and cash equivalents, property and land, furniture, raw materials, and inventory. Intangible assets include items such as shares, copyrights, patents, and trademarks.
The difference between assets and liabilities is simple: assets are things that a business owns or has control over that are expected to make money in the future. A company's liabilities are owed to other people, such as unpaid bills to suppliers, wages and benefits for employees, lease payments, mortgages, tax payments, and loans.