tailieunhanh - Accounting For Dummies 4th Edition_3

Tham khảo tài liệu 'accounting for dummies 4th edition_3', tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 36 Part I Opening the Books on Accounting Most businesses need a variety of assets. You have cash which every business needs of course. Businesses that sell products carry an inventory of products awaiting sale to customers. Businesses need long-term resources that are generally called property plant and equipment this group includes buildings vehicles tools machines and other resources needed in their operations. All these and more go under the collective name assets. As you d suspect the particular assets reported in the balance sheet depend on which assets the business owns. I include just four basic assets in Figure 2-2. These are the hardcore assets that a business selling products on credit would have. It s possible that such a business could lease virtually all of its long-term operating assets instead of owning them in which case the business would report no such assets. In this example the business owns these so-called fixed assets. They are fixed because they are held for use in the operations of the business and are not for sale and their usefulness lasts several years or longer. So where does a business get the money to buy its assets Most businesses borrow money on the basis of interest-bearing notes or other credit instruments for part of the total capital they need for their assets. Also businesses buy many things on credit and at the balance sheet date owe money to their suppliers which will be paid in the future. These operating liabilities are never grouped with interest-bearing debt in the balance sheet. The accountant would be tied to the stake for doing such a thing. Note that liabilities are not intermingled among assets this is a definite no-no in financial reporting. You cannot subtract certain liabilities from certain assets and only report the net balance. You would be given 20 lashes for doing so. Could a business s total liabilities be greater than its total assets Well not likely unless the business has been losing money hand over fist.