Classification of Assets and Liabilities

Assets = Fixed Assets + Current Assets

Fixed Assets
These assets will remain the business and give benefits for more than one year.

Examples:
  • Buildings
  • Machinery
  • Motor Vehicles
  • Furniture
  • Fittings
  • Equipment

Current Assets
These assets will remain the business and give benefits for less than one year.  The value will be constantly changing.

Examples:
  • Stocks/Inventory
  • Debtors
  • Cash at Hand
  • Cash at Bank 

Liabilities = Current Liabilities + Long Term Liabilities

Current Liabilities
These are amounts which have to be paid back within one year.

Examples:
  • Short Term Loans
  • Bank Overdrafts
  • Creditors


Long Term Liabilities
These are amounts which can be paid back after one year.

Examples:
  • Long Term Loans