We wanted to start a new series of blogs called, Devine Dictionary. It is exactly what it sounds like too, a review of accounting terminology for non-accountants. Periodically we will review some accounting language in hopes that you get a better understanding of the accounting you need to run your business and make accounting a little more approachable. So, let’s dive in. Today’s word is asset.
Assets are the elements of a business that has value and needs to be monitored through the business’s accounting. An asset is a mixture of things like cash, inventory, money you are owed through your accounts receivable and more. There are a few specific types of assets we are going to review, but keep in mind that we are just lightly touching on this topic. It is always best to consultant an accounting professional to make sure you have everything is recorded correctly. A fixed asset is something that a business owns for an extended period like a piece of land, a building or maybe some industry specific equipment. A financial asset includes stocks, bonds and other financial oriented items that the business owns or manages. Keep in mind this is what the business owns and manages, not by what the owner or CEO owns. Assets are reported on the balance sheet and are broken down based on your business’s specific assets.
Additionally, we wanted to note that business’s have assets that cannot be valued and therefore are not recorded through the business’s accounting. These include items like the company brand, patents and you, the employees who make the business successful! (Just a friendly reminder that you are an asset to your business!)
We hope that this helped you get a better understanding of assets and how they fit into your business’s accounting. Remember outsourcing your accounting to a professional team is a great way to ensure that you have your assets recorded correctly. That is what we do here at Devine, so give us a call to see how we can help be an asset to your business! 281-545-4000.