Assets Flashcards
(17 cards)
What is the definition of an asset?
Economic resources owned or controlled by a company that will provide a probable future benefit.
What do assets provide to a company?
Things a company uses to provide services to its customers so that the customers will pay them.
What qualifies an item as an asset?
If a company controls the future economic benefits of an item, that item qualifies as an asset whether legally owned or not.
What is an example of an asset that is leased?
A building that is being leased.
What is the economic substance of an asset?
Economic substance not legal form.
How are assets listed?
Listed in order of liquidity, which is the ease in which the item can be turned into cash.
What are examples of current assets? (4)
Cash, short term investments, inventory, prepaid expenses
What are examples of long-term assets? (3)
Investments, Property, Plant, Equipment, intangible assets.
What is the expected use period for current assets?
Assets expected to be used in one year or less.
What are examples of intangible assets?
Agreements, contracts, rights, permissions, patents, trademarks, copyrights, goodwill.
What amounts are assets reported at?
Current Market Value, Net Realizable, Historical cost.
What is the primary asset of any bank?
Accounts receivable (Loans receivable).
What are two reasons to have assets?
Earn income and exercise influence on the companies in which they invest.
What is cash? (5)
Coins
Currency
Checking/savings
Short term interest earning securities
Accounts receivable
What is Property, Plant, Equipment?
Land
Buildings
Machinery
Tools
Furniture
Fixture
Vehicles
What are other assets?
Deferred income tax assets
Long Term Receivables
What are intangible assets?
Contracts/Agreements
Can be bought from someone else only
