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Items to be Shown on the Asset Side

Asset: It refers to tangible objects or intangible rights owned by an enterprise and carrying probable future benefits.

  • Fixed assets: It refers to the assets which are held for producing goods or providing services and not for resale in the normal course of business. Fixed assets are classified into:
    • Tangible Fixed assets They refer to those which can be seen and touched. Example: land, building, machinery etc.
    • Intangible Fixed assets: They refer to assets which can neither be seen nor touched. Example: goodwill, patents, trademarks etc.
  • Investments: It represents an expenditure on assets to earn interest, dividend, income or other benefits. Example: Investment in shares, debentures, bonds etc.
  • Current assets: These are the assets which are convertible to cash in a short period say within one year. They are those assets which are held
    – In the form of cash.

    Example: cash in hand, cash at bank etc.

    – For conversion into cash.

    Example: stock, debtors, bills receivable etc.

    – For consumption or in production of goods or rendering of services.

    Example: raw materials, work in progress

  • Miscellaneous expenditure: The amount of expenditure which are yet to be written off, is taken to the Balance Sheet as fictitious assets. Example: preliminary expenses, deferred revenue expenditure etc.

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