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The Assets

The Balance Statement is divided into Assets and Liabilities. This is about the assets

The Assets can be divided into two types of assets:

  1. The Current Assets and
  2. The Fixed Assets

A third type of Assets which is a kind of "in between" the other two is the value of the stock.

Current assets

The Current Assets are the values which are fairly easy to get access to in case you need money.
The Current Assets are the following:

  • Cash
  • Bank account
  • Staff debtors - money which staff members owe to the company
  • Other debtors - money which other people/businesses owe to the company
  • Stock – goods that you are able to sell

Stock

If you have a production company or a shop you add the value of all the items in stock together in the balance statement. The stock is in your possession so you are the owes who own it.

Maybe you have not paid for all the stock yet, but then your debts to the stock will be shown under the "liabilities" in the Balance Statement.

The value of the stock is the value which was counted in the shop or at the production plant when closing of the accounts for the year.
Stock can fairly easily be converted to cash if needed by selling maybe at purchase value.

Fixed assets

Fixed Assets are the value in the company which is fairly difficult to get hold of, that means to convert to cash if you need it - opposite the Current Assets.

The Fixed Assets are:

  • Buildings
  • Tools and Equipment – the more expensive ones
  • Cars
  • Other equipment of a certain value.

Total assets

When you add the value of the Current Assets accounts, the Fixed Assets accounts and the value of the stock, you get the figure for the total Assets in the company.

Assets

Liability

Cash

7.000

Owners Equity

10.000

Bank account

4.000

Loan from Bank

12.000

Equipment

3.000

.

.

Stock

8.000

.

.

Total

22.000

Total

22.000


Current Assets + Fixed Assets = Total Assets.
- Go to next business issue: The Liabilities


It’s hard to beat a person who never gives up.
– Babe Ruth, baseball legend

What is a Financial Statement
Financial System - Illustrated
Profit and Loss Statement
The Balance Statement
The Assets
Understanding the Assets
The Liabilities
Understanding the Liabilities
Accountability and Management
What is Accountancy?
Principles in Accounting
Understand Financial Info
Safeguarding Your Assets
Help to Take Action
Close your Business