What is an asset?

Simply put an asset is something of value that your business has because of a past event. Your business has cash (the most famous asset) because it was invested in the company by the owner, it's some form of income from a sale, or you borrowed it from someone or a bank.

Assets can be broken down into categories and more subcategories, but I want to focus on the highlights. Cash, Inventory, and Fixed Assets (equipment)

Cash is the most liquid asset a company can own. A company’s cash account in its chart of accounts includes all currency and coins owned by the company as well as all deposits in the bank including checking accounts and savings accounts.

Inventory is the raw materials used to produce goods as well as the goods that are available for sale. The three types of inventory include raw materials, work-in-progress, and finished goods.

A fixed asset is a long-term asset, which means you will have it for more than a year, that a firm owns and uses to produce income