Everything that a business owns in order to successfully do business. For example: cash, land, tools, buildings, furniture, and vehicles. Anything that is owned by the company and is regarded as having value. An asset could be sold to pay debts. The assets of a company must equal their liabilities plus equity (this is the accounting equation. Watch for a future post all about this important concept!).

To make it easier to remember: and asset is what you OWN, a liability is who you OWE, and equity is what is left OVER. (Credit for this memory aid goes to Ben Robinson at the B3 Academy.)

Push 'em Out

Example:

Push ‘Em Out Birthing Center has $9,000 in the bank, owns a $25,000 building, has purchased $5,000 worth of office furniture, and owns $50,000 worth of birthing equipment and tools. The birthing center also has a car that they bought for $15,000 that is used by midwives for births they attend.  Their assets would equal $104,000.