Asset in financial accounting is the property of a business that has money value, benefit for which can be availed in future or it can be converted into cash.
Some examples for the assets are Building, Machine, Furniture, Vehicle, Debtor, Bills Receivable, Patents, Goods, Bank, Goodwill, Copyright etc. All these have money value and can also be converted into cash.
Assets are of various types: Fixed Assets, Current Assets, Tangible Assets, Intangible Assets, Fictitious Assets, Wasting Assets.
In this post we will explain you about all types Assets in detialed concept with explanation video in very different and easy way.
Fixed Assets: Fixed assets are the assets that remain with the business for more than one financial year. For Example: Building, Machine, Vehicle etc.
Current Assets: Current Assets are the assets that are converted into cash in the same financial year. For Example: Debtor, Bills Receivable, stock etc.
Tangible Assets: Assets that can be touched and seen are called Tangible Assets, e.g., Building, Machinery.
Intangible Assets: Asset which cannot be seen and touched are called Intangible Assets. Examples are – Goodwill, Patents, Trademarks, Copyrights, prepaid expenses, etc.
Fictitious Assets: Assets which are not visible by our naked eyes and have zero market value are known as fictitious assets. For Example: Advertisement Expenses, Preliminary Expenses.
Wasting Assets: Assets which are created by nature and whose value falls as we use them are known as wasting assets. For Example: Coal Mines, Gold Mines, Oil fields.
Explanation in very different way available on YouTube:
