TYPE OF ASSETS

• Current assets = convertible to cash in 1 year
  • Cash
  • Accounts receivable
  • Inventory
  • Prepaid expenses and deposits
• Long-term assets = held for more than 1 year
  • Property, plant and equipment
  • Land and buildings

TYPE OF LIABILITIES

• Current liabilities = payable within 1 year
  • Accounts payable
  • Accrued expenses
• Long-term liabilities = due after 1 year
  • Long-term debt

OWNER’S EQUITY

• This is the net worth of your business
  • Owner’s investment
  • Retained earnings