This document defines and categorizes assets, liabilities, and capital for businesses. Assets are property that can be converted to cash, including premises, land, equipment, and cash holdings. Assets are either tangible physical items or intangible non-physical items. They are also current assets meant to be converted to cash within a year, or fixed assets used longer-term. Liabilities are debts or obligations like loans, overdrafts, and expenses. Liabilities can be short-term obligations due in under a year, or long-term obligations due in over a year. Capital refers to the monetary resources owed to the business owner from starting funds, expansions, and retained profits.

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