Business Assets and Liabilities

• Assets are convertible to cash within one business operation year to cover operational expenses and investments.

Current Assets

• Physical money in the form of coins and banknotes is considered cash.
• Accounts receivable is the unpaid amount for products or services a company delivers to its customers.
• Inventory is the stock of goods or materials that a company holds.
• Prepaid expenses are expenses that are paid in advance.

Fixed (Non-Current) Assets

• Non-current resources that a company uses to produce goods and services that have a life of more than one year.
• Tangible fixed assets include trucks, office furniture, machinery, buildings, and land.
• Intangible fixed assets include goodwill, patents, copyrights, trademarks, and franchises.

Liabilities

• Obligations that the law requires to be paid to another organization or individual.
• Creditor's claims on a company's assets.
• These claims show how much creditors would own if the company were to sell off its assets.

Current Liabilities

• Debts that the business has to pay back within the next 12 months.
• Accounts payable is the unpaid amount of products or services of the business
• Salaries and wages are compensation paid to employees for their work or services
• Notes payable is a written promissory note for the debt a company owes to another business
• Mortgage payable is the amount of money owed by the company for a property loan

Non-Current (Long-Term) Liabilities

• Debts not due for more than 12 months.
• Customer deposits are amounts received from customers in advance for goods or services not yet provided.
• Lease obligations are long-term agreements with periodic payments for using property, equipment, or vehicles.
• Pension liabilities are obligations arising from employee retirement plans.
• Long-term debt consists of loans and borrowings with more than one year of maturity.
• Warranty liabilities are obligations to repair or replace products with defects or issues within a specified period after the sale.

Equity

• The sum invested in a company by its owners in addition to any earnings that are still retained.
• Owner's capital represents the amount of money or assets that the owner has contributed to the business
• Owner's withdrawals refers to money withdrawn by business owners for personal expenses or investments.
• Common stocks represent ownership in a company.
• Retained earnings refers to the portion of a company's net income that is retained and reinvested in the business.