Assets

We have seen that ‘assets’ are what the business owns. These can be split up according to how long we intend to keep them. There are two types of assets:

Current Assets – this is what we own now but will not own in 12 months as they constantly change. Examples are stock, debtors, bank and cash. Yes, we will have stock in 12 months but it won’t be the same stock. We will also have cash in 12 months but it won’t be the same notes and coins.

Fixed Assets – this is what we own now and will still have next year and probably for longer. Examples are premises, equipment, fixtures and fittings (furniture), and a van.

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Notes for finance exam