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Essay about Assets

: Shavitri Rahmatullaili
: 180422623134
Assets in accounting have the meaning as wealth that owned by a company. What is
meant by the wealth is resources that can be in form of objects or rights, previously obtained
by the company through transactions or activities in the past and intended to provide benefits
in the future. The company uses its assets in carrying out activities such as production and
sales. In general, assets are divided into four that are current assets, long term investment,
fixed assets, and intangible assets.
Current assets is assets that the company expects to be converted into cash or used in
approximately one year. Common types of current assets are prepaid expenses (insurance and
supplies), inventories, receivebles (notes receiveble, accounts receiveble, and interest
receiveble), and cash. Long term investment is a form of long term business outside the
company’s main activities. For example, investment in other companies. Fixed assets is
tangible assets obtained in form of ready-to-use or must be built first, to be used in the
company’s operation and have benefits for more than one year. Fixed assets include land,
buildings, equipments, cars, and so on. Intangible assets is assets that have no physical form
but have benefits for the company. Examples of intangible assets are patents, copyrights,
franchises, goodwill, and brand rights.
Long term investment, fixed assets, and intangible assets are include in non-current
assets. Non current assets is assets that are expected to be used by company with a period of
more than one year.
Assets value needs to be examined because it becomes the basic for measuring the
company's financial performance. This measure becomes a comparison of the achievements
of a company with the achievements of other companies in the same case, whether it is better
or not, so that it can be the basic of management decisions to maintain or improve it.
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