What Does Asset Mean In Accounting?
Here we will study What is an Asset in Accounting or What does Asset mean in Accounting World?
Assets are those resources or possession owned by the business that provide probable future benefits to the business in the coming Accounting Period. In Asset, the benefit will be get
in near future. Assets are obtained by the business from two main sources. One is Liabilities and other one is Owner’s Equity or Simply Equity also called Capital in case of Sole Proprietorship.
Assets Accounting Definition
Assets are those resources or possession owned by the business that provide probable future benefits to the business in the coming Accounting Period. In Asset, the benefit will be get
in near future. Assets are obtained by the business from two main sources. One is Liabilities and other one is Owner’s Equity or Simply Equity also called Capital in case of Sole Proprietorship.
Assets Examples include Cash, Accounts Receivable, Inventory or Closing Stock, Plant And Machinery, Office Equipment, Furniture & Plant, Goodwill, Patents, Franchise etc.
Rules of Debit And Credit For Assets
The Natural Balance or Favourable Balance for Assets is Debit balance while Negative or Unfavourable Balance is Credit. When an Asset increases we debit it and it decreases when we credit
it. Asset is transferred to Balance Sheet at the end of Accounting Period.
There are two types of Assets:
Current Assets having life on year or less that these are convertible into cash within the Current Accounting Period. Current Assets Examples include Cash, Accounts Receivable, Inventory
or Closing Stock, Prepaid Expenses, Outstanding Expenses.
Non Current Assets having life more than one year and these are used in the business. Fixed Assets Examples include Plant & Machinery, Furniture & Fixtures, Office Equipment,
Building, Land, Goodwill, Patents, Franchise, etc. Fixed Assets include Tangible And Intangible Assets. Tangible Assets have physical existence while Intangible have no physical existence. Depreciation is applied on Tangible
Fixed Assets while Appreciation is applied on Intangible Assets.
Another Word for Assets
Useful Resources or Benefits, Economic Values Of Goods, Things, Property, Cash, Land & Buildings etc.
So, this is the article is an explanation of Assets Meaning In Accounting.
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