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Hi. Janis Weber here.
I am continuing the series that
introduces financial
accounting concepts.
So this has been a good
experience for me,
and I'm hoping to
make accounting
something that's
interesting to you as well.
So maybe you will dig
in a little deeper
and learn more about
accounting in the future.
Today, this session will cover
just a little more
detail about one of
the concepts we've been
talking about a lot,
and that is the assets
of the company.
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My background in accounting
spans two careers.
First, I was a CPA
in public practice,
and then now I'm an educator
for a public university.
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The assets, basically, are
everything the company owns
that they could
produce income with or
that could help them to be
a success in their company.
So the term we've used to
refer to assets is resources.
Resources are these
investments we have made
that will provide a future
economic benefit to the company,
and they could be that they
would produce cash flow such as
more revenue, increased
revenue, or lower cost,
or they might
increase productivity
if we're producing some
product or service.
And then that ultimately would
give us subsequent income
because of our investment
in these assets.
Secondarily, in order for it
to be considered an asset
besides just being a
resource, the company can use
in order to be an asset,
it must have an
ownership element.
So the company has
to have invested
something to have
obtained this resource.
That could mean they
paid cash for it
or they gave other assets
in exchange for it,
or maybe they promised to
make payments in the future
as in they borrowed
money to buy it.
But somehow or another,
this company has to have
extended themselves
to own the goods
that they're using as
resources in the company.
Then once the company has
acquired these resources,
then their mission is to make
money with these assets,
so to help produce
the goods or services
or otherwise produce
additional income.
