John NoelsAssets and liabilities are a vital part of a company or an individual’s life. It defines their worth and their spending capacity in the market. Moreover, one must have basic knowledge about it to run a business. Therefore, it can also be asked of finance students in the form of projects. However, many students still struggle because they find the concept confusing. Yet, one can seek finance dissertation help from an expert to overcome this issue. This article will discuss the basic concepts of assets and liabilities. In addition, with examples that you must know for its project. So, let’s start by understanding the basic definition of them.
What Are Assets and Liabilities?
An asset is a part that adds value to a company and increases the equity of an organization. Moreover, if it is more than the liabilities, an institution is more likely to be stronger. Whereas, liability is something that a company or an individual owes to another and has to pay later. Therefore, it is generally a sum of money that is the due amount one needs to pay later. Now, let’s move to the category of assets and liabilities. Furthermore, let us understand them in brief.
Classification of Assets and Liabilities
You must know about their category based on real-life examples. It can help you understand and get the topic better for project. Thus, there are some types of liabilities and assets with instances in the below pointers. So, without wasting much time, read it till the end to get insightful knowledge about it.
Fixed Assets
The first one to begin with is fixed assets. They are a much hold of things that a company holds. Moreover, they are not to be sold by the firm and are to be used for a longer span. These kinds of parts are long-term assets or fixed portions of an individual. In addition, it includes plants, paintings, machinery, tools, vehicles, etc.
Examples of Fixed Assets
- Land– It is the area in use for business operations or organizations. Also, it comes under the category of fixed assets.
- Fixtures and Furniture: It includes office equipment and desks that one considered fixed assets. Moreover, this also contains cubicle walls or rugs.
Current Assets
Moving on, let’s know about current assets. They are the proportion or hold of shares that an organization expects to convert. It is into liquid cash and can be consumed within one year or less than that. Moreover, they are usually marked on the balance sheet in order of liquidity. It means the ease and simplicity with which a company can convert them into cash. Besides, your project is also an asset. So, if you face any challenges while working on it, you can seek university assignment help from an expert.
Examples of Current Assets
- Cash:The amount of money you have in the bank or in deposit.
- Securities: Investments that you can convert into cashor in liquid money.
Liquid Assets
Liquid assets are those that are already in the state of cash. Therefore, one can convert it into liquid money and have almost no effect on the price stated in the market. Moreover, they also reflect on the prices and work according to the change. Still unclear? No worries, you can check the below example for better clarity.
Examples of Liquid Assets
Inventory: The amount of product or stock within a company.
Accounts Receivable: It is the balance collected by a company or an organization from its products or services.
Wasting Assets
You must be thinking about this proportion as a trash area. But no! They are viable and vital for an organization to work. Wasting assets are the ones that have a useful life, and companies use them as they depreciate with time. Yet, they do become useless after some years. But they are vital for any country to function for its basic needs and budgets.
Examples of Wasting Assets
Natural resources such as timber, coal, gas, etc. Yet, their value can decrease with time because of the amount of resources in use.
Vehicles and machines also come under wasting assets. Moreover, It can be used for a company or an organization, for that matter.
Current Liabilities
You must have gotten an idea about it with its name. In simple words, it means the recent one. Moreover, it is the ones that businesses settle within one year. Its examples range from accounts payable to payable income tax. Let’s understand more about its instances.
Examples of Current Liabilities
Accounts Payable: It shows on the balance sheet report under the segment of current liabilities.
Accrued Expenses: Listed in the current liabilities section of the balance sheet. They show short-term financial information.
Non-Current Liabilities
You can refer to non-current liabilities as the debts that a company owes. Moreover, they are also known as long-term liabilities or long form in market in better form. Yet, it is best to complete the remaining payments within a year, as it is vital for any organization. Besides, they are a crucial part of the cash flow process. A company can see the ability or powers to pay future debts. It is with a comparison between cash flow and non-current liabilities. Furthermore, you must provide examples for your project to understand better.
Examples of Non-Current Liabilities
Long-Term Borrowings: Includes lines of credit cards with repayment periods.
Long-Term Lease: Companies usually sign a retail contract for land over a year.
Fixed Liabilities
Fixed liabilities are also named long-term liabilities. They are financial obligations or restrictions of an organization, due more than one year or more ahead. Moreover, these payments get marked on the balance sheet. It is to give a more precise view of the current liquidity of the organization. Also, you must know its examples or instances to know better about it. Have a look.
Examples of Fixed Liabilities
Bond – The long-term part of the agreement payable i.e in a contract form, reported as a long-term liability.
Present value – The amount of a lease payment that usually extends past one year or more than that.
Contingent Liabilities
It is a potential debt that may come up in the future. Moreover, it also depends on the outcome of a certain event or situation. They get included in the liabilities section. Yet, they can be unclear, as they rely on the size of the happening, like a legal case or warranty claim.
Examples of Contingent Liabilities
Warranty Policies – It is a term period that a company provides on a particular service or a product. A customer can have extra benefits such as free repair or exchange for a specific span.
Legal case – Can file a case against the company if the service or a product lacks its basic functioning.
Conclusion
To conclude, you must have found this article well. It has everything you must know about your finance project. Moreover, it is vital for every subject-related student. It aims to grow in the respective field. Moreover, one must have the basic knowledge to complete a paper. Yet, many students face problems in writing the exam. It could be because of a lack of guidance and improper data. One can seek finance dissertation help from an expert to solve this problem. It can help in boosting the efficiency and accuracy of the task. Also, assists in improving grades to do well in the future.
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