Essential Features of Accounting Terms Assets and Liabilities

Accounting and business
decision

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Describe the essential features of accounting terms assets and liabilities..........................3
2. Statement of financial performance for the year ending 31/12/2013.................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Books of accounts are the mandatary records to be maintained by the company. When
there is need to judge the performance and compare the progress, statement showing organisation
position is used. Such books of accounts ensures smooth working of organisation. It contains
deep information about company's assets, liabilities and other informations, regarding the
operation of the business entity (Brei, Mohan, and Strobl, 2019). In this report, assets and
liabilities essential features are to be discussed. Along with the Jonas flower shop's financial
records are to be made.
MAIN BODY
1. Describe the essential features of accounting terms assets and liabilities.
a) Assets
It is described as anything which a organisation owns and have authority on. These have
ability to provide future benefit to the company(Cashwell, Copley, and Dugan, 2019).It appears
left side on the horizontal balance sheet. It shows the company's stability in the market. Higher
the assets stronger the company's profile. Based on different factors assets are divided in six
categories. Knowns as current, fixed, tangible, operating, non- operating.
Current assets are the type which is readily available to be converted into cash. Also
known as liquid assets due to its importance to business liquidity. Cash and cash equivalents,
debtors, market securities, stock, short-term investment. These assets are really important to meet
the short term requirement of the business. Current assets of the company should be maintained
strongly.
Fixed assets is the category of the company's possession that is not easily converted to
cash. These are basically investment. These assets have useful life of more than one year. It is
recorded as property, plant and equipment in the balance sheet of the company. Popularly known
as non-current asset. Example of these assets are transportation vehicle, furniture and fixture,
machinery, building and land.
Tangible assets have a fixed physical form and a defined price. It is easily transferable. It
account company's overall assets. It is accounted as long term and current assets. Depreciation is
applicable on these assets.