Assets
What are Assets?
Assets are things a business owns or that are owed to the business.
![ass1](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass1.jpg)
How it Works
In any business, money or value comes from somewhere.
![ass2](https://seeaccountingnow.online/wp-content/uploads/2021/06/ass2.jpg)
For example, the business may borrow money.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass3.jpg)
It may also get goods or services on credit from suppliers.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass4.jpg)
The owner may also put some of their own capital into the business.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass5.jpg)
Finally, the business will receive money from sales.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass6.jpg)
Once received, this money or value goes somewhere—or is used somewhere
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass7.jpg)
Expenses V’s Assets
Expenses
Some of this money will be used to pay for expenses.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass8.jpg)
Expenses are those costs incurred in the day-to-day running of a business.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass9.jpg)
They include things like telephone, rent, wages, and purchases.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass10.jpg)
The business will pay cash for some expenses.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass11.jpg)
It will also buy some goods and services on credit.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass12.jpg)
Regardless of how they are acquired, expenses are fully consumed or used up during an accounting period.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass13.jpg)
Assets
The business will also use money and value to acquire assets.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass14.jpg)
Some assets will be tangible.
![ass15](https://seeaccountingnow.online/wp-content/uploads/2021/06/ass15.jpg)
For example, equipment is a tangible asset.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass16.jpg)
Inventory, too, is a tangible asset
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass17.jpg)
Other assets will be intangible.
![ass18](https://seeaccountingnow.online/wp-content/uploads/2021/06/ass18.jpg)
For example, a patent is an intangible asset.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass19.jpg)
Another asset is money held at the bank.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass20.jpg)
Finally, assets also include money that is owed to the business.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass21.jpg)
Unlike expenses, assets are not consumed during the accounting period.
![](https://seeaccountingnow.online/wp-content/uploads/2020/05/ass22.jpg)
© R.J. Hickman 2020