4. Assets:
The word 'asset' is derived from the French word 'assez' which means 'enough'. So, asset means enough or sufficient things of value owned by a concern for carrying on the business. In other words, assets refer to things or rights of value owned by a business and also debts (i.e., amounts) due to the business from others.
Assets include:
(a) Physical or real properties or things called tangible assets like lands, buildings, machinery, vehicles, furniture, stock of goods, cash, etc., owned by a business.
(b) Rights in certain things or certain rights having money value called intangible assets, such as goodwill, patent right or parents, trade marks and copy rights possessed by the business.
(c) Debts (i.e., amounts) due to the business from others, e.g., sundry debtors, bills receivable, prepaid expenses, outstanding incomes, etc.
Differences between Goods and Asstes:
The main differences between Goods and assets are:
(1). Goods refer to things in which a business deals. But assets refer to things with which a business deals.
(2). Goods are meant for resale, whereas assets are meant for use in the business.
(3). The scope of the term 'assets' is wider than that of the term 'goods', because the term 'assets' includes goods as well as other things.
(4). Goods are tangible, whereas assets may be tangible or intangible.
(5). Goods are the items of trading account. But assets are the items of balance sheet.
The word 'asset' is derived from the French word 'assez' which means 'enough'. So, asset means enough or sufficient things of value owned by a concern for carrying on the business. In other words, assets refer to things or rights of value owned by a business and also debts (i.e., amounts) due to the business from others.
Assets include:
(a) Physical or real properties or things called tangible assets like lands, buildings, machinery, vehicles, furniture, stock of goods, cash, etc., owned by a business.
(b) Rights in certain things or certain rights having money value called intangible assets, such as goodwill, patent right or parents, trade marks and copy rights possessed by the business.
(c) Debts (i.e., amounts) due to the business from others, e.g., sundry debtors, bills receivable, prepaid expenses, outstanding incomes, etc.
Differences between Goods and Asstes:
The main differences between Goods and assets are:
(1). Goods refer to things in which a business deals. But assets refer to things with which a business deals.
(2). Goods are meant for resale, whereas assets are meant for use in the business.
(3). The scope of the term 'assets' is wider than that of the term 'goods', because the term 'assets' includes goods as well as other things.
(4). Goods are tangible, whereas assets may be tangible or intangible.
(5). Goods are the items of trading account. But assets are the items of balance sheet.
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