Assets: What You Own and Why It Matters

In bookkeeping, an asset is something your business owns that will be valuable in the future. It’s anything you can turn into cash or use to help your business earn money.

Bookkeepers use a basic rule called the accounting equation to track assets:

Assets = Liabilities + Equity

The Two Main Types

• Current assets are cash or things you expect to turn into cash within a year, such as bank balances, unpaid customer invoices, or inventory.
• Fixed assets are long-term investments you use to run your business, like vehicles, equipment, or property. These are tracked over time and their value goes down as they wear out, which is called depreciation.

Why It Matters

We keep track of assets to make sure your Balance Sheet is correct. Knowing what you own helps you see how easily you can pay your bills and makes sure you don’t pay too much in taxes by properly recording your equipment’s value.

In short, assets drive your business forward. Our job is to make sure they are measured and recorded correctly.