Balance sheet items

1. Assets, Liabilities
and Capital
By Bweendo Jane
Lecturer
Zambia College of Distance
Education

2. Assets
Assets refer to property owned by a business that can be
converted into cash.
Examples include:
 Premises
 Land and buildings
 Fixtures and fittings
 Motor vehicles
 Furniture
 Cash at bank
 Prepaid expenses etc.

3. Types of Assets

4. Tangible and Intangible Assets
 Tangible assets are physical property owned
by the business.
 Intangible assets are assets that cannot be
seen and touched; they are non-physical
assets.

5. Current Assets
 Current assets are physical property of the
business that can quickly be converted into
cash within a period of less than one year.

6. Fixed Assets
Physical property of the business kept in the
business for a longer period and cannot be
quickly converted into cash.
Features of fixed assets:
 used in the business to generate revenue
 last for at least more than one year
 Bought specifically for use and not for resale.

7. Liabilities
Liabilities refer to debts or obligations that arise
in the course of doing business. Examples of
liabilities include:
 Loan (money borrowed)
 Bank overdrafts
 Creditors (accounts payable)
 Mortgage
 Accrued or outstanding expenses

8. Types of Liabilities
Liabilities can either be short-term or long-term.
Short-term liabilities
These are debts or obligations payable within a
period of less than one year. Examples are:
 Short-term loans
 Bank overdrafts
 Creditors (accounts payable)
 Accrued or outstanding expenses – expenses due
but not yet paid

9. Long-Term Liabilities
These are debts or obligations payable in a
period of more than one year.
Examples are:
 Long-Term loans
 Mortgages etc.

10. Capital or Equity
Capital or equity refers to the amount of
resources the business owes its owner. This
includes;
 the amount of money used to start,
 the amount used to expand the business
 the profits not take out of the business.
Capital is often described as the liability of the
business to its owner.

11. Summary
 Assets refer to the property owned by a
business
 Liabilities are debts or obligations that arise in
the course of doing business.
 Capital the amount of resources the business
owes its owner

12. End!
Thank you