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What are a company's assets?

Updated: 4/28/2022
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12y ago

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A company's major assets are cash and cash equivalents, accounts receivable, inventories, prepaid expenses, and the investments made by the company.

In accounting, an asset represents a cost incurred now, from which future benefits will be obtained over a period of time (or over several accounting periods). For example, if a manufacturer buys factory equipment, he will get economic benefits from that equipment (revenues from the sale of the products made with that equipment) in the future. Accordingly, the purchase price (cost) equipment is classified as an asset, instead of an expense. As the asset gets older and gets "used up" in production, depreciation expense is recorded for the equipment, which reduces its value on the company's books.

Some additional common assets not mentioned above are plant, property and equipment ("fixed assets"), and intangible assets, such as patents and copyrights owned by the company.

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