All the resources which are owned and controlled by the business are called Assets.
They give future economic benefit to the business, that is they help the business earn income.
- Motor Vehicles
- Furniture and Equipment
- Cash in Hand
- Cash in Bank
- Stock (Inventory): the goods which are bought with the intention of selling to the customers
- Debtors (Trade Receivers): the people to whom the business has sold goods on credit and will receive money for them at a later date
It is the obligation a business has to outsiders. It is the money which the business owes to outsiders.
- Bank loan: this is where money is borrowed from the bank and will be paid back later
- Creditors (Trade Payables): the people from whom a business buys goods on credit and will have to pay back in a later date.
The amount of resources invested by the owner is called capital. It is what the business owes to the owner in case of business closing down.