Assets – Meaning and Definition

Assets in common language means anything that we own e.g. your house, your car, your office, the furniture in your house as well as office ,the cash balance you have in your hand as well as in bank, the jewellary etc are all your assets. However in accounting we have some broader meaning of the term assets. In accounting, assets are anything which has got some economic value and which is owned by the business entity. Some examples of assets are cash in hand, bank balance, investments, stock, land, building,…

Accounts- Types

Lets start our discussion with an example. Suppose you start a new business by investing money in the business. You purchased land, furniture, raw material etc. You opened a bank account. You made some credit purchases form a vendor named Mohit. You sold the goods to a cusomer named Rahul. You also paid salaries to the staff and incurred many other expenses. Apart from the sales revenue you also received some non operating incomes like rent and interest. Now how would you record the transactions in the books. The first…