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List Of Assets And Liabilities In Accounting Pdf

Accounting is the process of recording, classifying, and summarizing financial transactions to provide accurate financial information to the stakeholders of a business. Assets and liabilities are two important components of accounting that are essential for any business to function. Assets are resources owned by a company, while liabilities are obligations owed by a company. In this article, we will discuss the list of assets and liabilities in accounting pdf.

Assets in Accounting

Assets are resources that provide future economic benefits to a business. They are classified into two major categories: current assets and non-current assets.

Current Assets

Current assets are assets that are expected to be converted into cash within the next 12 months. They include:

  • Cash and cash equivalents: This includes physical cash, bank deposits, and other highly liquid investments that can be easily converted into cash.
  • Accounts receivable: This is the amount of money owed to a business by its customers for goods or services provided on credit.
  • Inventory: This refers to the stock of goods that a business holds to sell to customers.
  • Prepaid expenses: These are expenses that a business has paid in advance, such as rent or insurance.

Current Assets

Non-Current Assets

Non-current assets, also known as fixed assets, are assets that are not expected to be converted into cash within the next 12 months. These assets have a long-term useful life and are usually held for more than one accounting period. They include:

  • Property, plant, and equipment: This includes land, buildings, machinery, and any other assets used in a business's operations.
  • Intangible assets: These are assets that do not have a physical substance, such as patents, trademarks, and goodwill.
  • Investments: These are long-term investments in stocks, bonds, or other securities.

Non-Current Assets

Liabilities in Accounting

Liabilities are obligations that a business owes to others. They are classified into two major categories: current liabilities and non-current liabilities.

Current Liabilities

Current liabilities are liabilities that are due within the next 12 months. They include:

  • Accounts payable: This is the amount owed by a business to its suppliers for goods or services received on credit.
  • Short-term loans: These are loans that are due within the next 12 months.
  • Accrued expenses: These are expenses that have been incurred but not yet paid, such as salaries and wages.
  • Income taxes payable: This is the amount of income tax owed by a business to the government.

Current Liabilities

Non-Current Liabilities

Non-current liabilities, also known as long-term liabilities, are liabilities that are not due within the next 12 months. They include:

  • Long-term loans: These are loans that are due after the next 12 months.
  • Bonds payable: These are long-term debt securities issued by a business.
  • Deferred income taxes: This is the amount of income tax that a business will pay in the future.

Non-Current Liabilities

Conclusion

Assets and liabilities are important components of accounting that help businesses to understand their financial position. While assets provide future economic benefits, liabilities are obligations that a business owes to others. By understanding the list of assets and liabilities in accounting pdf, businesses can make informed decisions about their finances and plan for the future.

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