Free small business accounting software primarily focuses on assets. Assets may be described as valuable resources owned by a business, which were acquired at a measurable money cost. As an economic resource, they satisfy three requirements. In the first place, the resource must be valuable. A resource is valuable if it is cash/ convertible into cash; or it can provide future benefits to the operations of the firm. Secondly, the resource must be owned. Mere possession or control of a resource would not constitute an asset; it must be owned in the legal sense of the term. Finally, the resource must be acquired at a measurable money cost. In cases in which an asset is not acquired for cash or a promise to pay cash, the question is what it would have cost had cash been paid for it.

The assets in the balance sheet are listed either in order of liquidity- promptness with which they are expected to be converted into cash- or in reverse order, that is, fixity or listing of the least liquid (fixed) first followed by others. All assets are grouped into categories; that is, assets with similar characteristics are put in one category. The assets included in one category are different from those in other categories. The standard classification of assets divides them into fixed assets, current assets, investments and other assets.

Fixed assets are fixed in the sense that they are acquired to be retained in business on a long-term basis to produce goods and services are not for resale. In contrast to fixed assets, current assets are short-term in nature. They refer to assets/resources, which are either held in the form of cash or are expected to be realized in cash within the accounting period or the normal operating cycle of the business. Investments represent investment of funds in the securities of another company.

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This HSC Business Studies PODCLASS explains how to produce the asset side of a Balance Sheet. There are three main classes of assets. These are the current assets, the non-current assets and the intangible assets. For the liabilities side and many other videos on Business Studies, go to smarttoolsforschools.com

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