Assets and liabilities
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Evangelin S
By Evangelin S
Published on Tuesday 30th 2008
As far as the world of accounts is concerned, let me tell you that it is very important for all of us to have a basic knowledge of the some of the crucial terms! Some of them are discussed below-
The two main terms that play a very important role are assets and liabilities!
Assets and liabilities
eAs far as the world of accounts is concerned, let me tell you that it is very important for all of us to have a basic knowledge of the some of the crucial terms! Some of them are discussed below-
The two main terms that play a very important role are assets and liabilities!
The Assets- these are our property, I mean that assets are generally those possessions of an individual that have a good market value or we can say the other way around as well. They are very valuable as far as the market position is concerned. Assets are mainly classified into three types-
The first classification is: Current Asset- It is in the form of cash that is the most basic asset of any individual. One can also include that amount of cash that is included in accounts like the checking and savings accounts and at the same time you can also include all those marketable securities in the form of bonds, stocks, shares etc. if you have given any kind of payments to your clients even then they also form a part of assets only.
The next category includes: Fixed Asset- this is geared up with all the tangible valuable things like property, machines, equipments, land... I mean to say that all the goods that are not meant to be sold and form a part of your fixed assets. They are your own property.
Intangible Asset- you can not touch them, as they come in the category of all the untouchable things. Okay I would like to give you some examples: copyrights, patents, and trademarks etc. that have tremendous monetary significance.
Liabilities again are of two kinds-
1. The Current Liabilities- Now the fact is that where there is assets, liabilities will also follow! Okay let us discuss something about them! They are the ones that are to be paid back within a certain time limit and most often through your current assets.
2. Long Term Liabilities- these are those kind of liabilities, basically in the form of debts, that can be repaid at ease for the tenure is more than a month.
Let us discuss one more very important term: The Financial Capital- it is nothing but the overall economic capital. As far as any liquid medium is concerned, or if we have a look in terms of merchandise , then the financial capital stands for wealth or other styles or capital.
One more important term: Petty Cash is the smallest account within a business setting or the cash in bills and coinage required to pay little expenses.
The two main terms that play a very important role are assets and liabilities!
The Assets- these are our property, I mean that assets are generally those possessions of an individual that have a good market value or we can say the other way around as well. They are very valuable as far as the market position is concerned. Assets are mainly classified into three types-
The first classification is: Current Asset- It is in the form of cash that is the most basic asset of any individual. One can also include that amount of cash that is included in accounts like the checking and savings accounts and at the same time you can also include all those marketable securities in the form of bonds, stocks, shares etc. if you have given any kind of payments to your clients even then they also form a part of assets only.
The next category includes: Fixed Asset- this is geared up with all the tangible valuable things like property, machines, equipments, land... I mean to say that all the goods that are not meant to be sold and form a part of your fixed assets. They are your own property.
Intangible Asset- you can not touch them, as they come in the category of all the untouchable things. Okay I would like to give you some examples: copyrights, patents, and trademarks etc. that have tremendous monetary significance.
Liabilities again are of two kinds-
1. The Current Liabilities- Now the fact is that where there is assets, liabilities will also follow! Okay let us discuss something about them! They are the ones that are to be paid back within a certain time limit and most often through your current assets.
2. Long Term Liabilities- these are those kind of liabilities, basically in the form of debts, that can be repaid at ease for the tenure is more than a month.
Let us discuss one more very important term: The Financial Capital- it is nothing but the overall economic capital. As far as any liquid medium is concerned, or if we have a look in terms of merchandise , then the financial capital stands for wealth or other styles or capital.
One more important term: Petty Cash is the smallest account within a business setting or the cash in bills and coinage required to pay little expenses.