The Balance Sheet
Definitions of Balance Sheet Items – Assets
Balance sheets may be quite detailed depending on the nature and complexity of a business. Regardless of their complexity, however, the same basic notions of construction apply. Again it is helpful to keep in mind the "left–right" balance sheet orientation. An illustration of a somewhat complex balance sheet may help understand the different types of accounts. AssetsAssets:Rights or resources that have future benefit or service potential, which can be expressed in money terms and which result from a business transaction. will be covered first on this page, and then claims on assets will follow.
Balance Sheet
Products, Inc.
January 1, 2012
Scroll over account names for definitions
Assets |
| Current AssetsCurrent Assets:Liquid assets. |
| CashCash:Negotiable checks and checking account balances, cash on hand. Savings accounts are usually classified as cash. |
$50,000 |
|
| Marketable SecuritiesMarketable Securities:Ownership and debt instruments that can be readily converted to cash. |
$70,000 |
|
| Accounts ReceivableAccounts Receivable:Monies due on accounts from customers. |
$95,000 |
|
| Notes ReceivableNotes Receivable:Monies due from debtors. |
$50,000 |
|
| InventoriesInventories:Balances of goods on hand. Include raw materials, work in process, finished goods. |
$90,000 |
|
| Total Current Assets |
|
$355,000 |
| Long-Term AssetsLong-Term Assets:Generally, long-term assets take longer than a year to be converted to cash. |
| Tangible AssetsTangible Assets:Physical facilities used in the operations of the business. |
|
|
| LandLand:Shown at acquisition cost and not depreciated. |
$89,000 |
|
| BuildingsBuildings:Structures valued at cost plus permanent improvements. |
$99,000 |
|
| MachineryMachinery:Equipment listed at historical cost. |
$35,000 |
|
| −Accumulated DepreciationAccumulated Depreciation:Contra-asset account. Reduces gross fixed assets. |
−$5,000 |
|
| Net Tangible AssetsNet Tangible Assets:Gross tangible assets minus accumulated depreciation. |
$218,000 |
|
| Intangible AssetsIntangible Assets:Nonphysical assets such as legal rights or excess earning power caused by a business transaction. |
|
|
| GoodwillGoodwill:Arises from the acquisition of a business for a sum greater than physical asset value. |
$20,000 |
|
| PatentsPatents:Exclusive legal rights granted to an investor for a period of 17 years. |
$19,000 |
|
| TrademarksTrademarks:Distinctive names or symbols. Granted for 28 years with option for renewal. |
$13,400 |
|
| Organizational CostsOrganizational Costs:Legal costs incurred when a business is organized. Carried as an asset and usually written off over a period of 5 years or longer. |
$22,900 |
|
| Total Intangible Assets |
$75,300 |
|
| Other AssetsOther Assets:Assets that do not fit into one of the other classifications. |
|
|
| InvestmentsInvestments:Usually stocks and bonds; as well as monies set aside in special funds. |
$23,000 |
|
| Deferred ChargesDeferred Charges:Expenses which have been deferred until some future period. |
$53,000 |
|
| Total Other Assets |
$76,000 |
|
| Total Long-Term Assets |
|
$369,300 |
| Total Assets |
|
$724,300 |
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