What are assets?

The things that are owned by any business organization are known as assets. In order for an item to be considered an asset, it must meet two requirements: (1) it must be owned by the organization, and (2) it must have money value. Ownership is the exclusive right to possess, use, enjoy, and dispose of property. Money value exists if a buyer is willing to pay a sum of money to a seller for the property.

KEEP TRACK OF ASSETS
Since there apparently are many different kinds assets, how does the accountant keep track of all of the assets? The accountant does not keep track all of them individually, but rather combines assets of a similar nature into common groups. For example, an individual or business organization may have such assets as coins, bills, money orders, and checks. These assets would be placed in a category or grouping known as cash. Thus, any money, regardless of its actual form, would be known and categorized as cash. Cash also includes money in bank accounts of the business organization that is available for payment of bills. It is the responsibility of the accountant to follow generally accepted accounting principles in placing individual assets in a specific and appropriate category.