– Assets are the claim of owners and they are the capitals.
– They can be converted into cash.
– In other words, assets are the productive tools.
Assets can be divided into 3 categories namely current assets, working assets or medium term assets and fixed assets.
a) Current assets: These are the assets which can be converted into cash within 1 month at normal market price. For ex: cash in hand, cash in bank, gold, silver, cheque etc.
b) Working assets: These can be converted into cash from 1 month to 1 year at normal market price. In this category, stock of food materials like cereals, stock of inputs, minor tools and equipment etc. are included. If the share is of popular company then it may fall in working assets.
c) Fixed assets: Those which require longer period of time to be converted into cash. For ex: buildings, land, large machinery, orchard etc. copyrights, shares etc. fall under fixed assets.