Classification of Assets

Assets are the properties by a business firm and the amount due to it from others. Assets are generally classified as: (i) Current Assets; (ii) Investments; (iii) Tangible Long-Term or Fixed Assets and; (iv) Intangible Assets.

Current Assets:

These assets consist of cash and other assets such as debtors, bills receivable, stock of goods (inventories), raw material, prepaid expenses etc., that are reasonably expected to be converted into cash or be sold or be consumed within one year from the balance sheet date is known as current assets.

Investments:

Investments in shares, debentures, bonds or even term deposits that will be retained for more than one year or one operating cycle appear under this classification.

Tangible Long-Term of Fixed Assets:

The term fixed assets is used for long-lived or permanent assets is used of tangible nature that are acquired for use in operating rather than for resale as goods. Tangible fixed assets are whose which have physical existence and are concrete items.

Intangible Assets:

Intangible fixed assets are having no physical existence and having a long life. They are non-visible and derive their value from the rights conferred upon their owner by possession.

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