Assets appear on the Balance Sheet and show what a business owns. They help determine the financial strength and stability of a business.
Businesses use assets (like machinery, vehicles, and inventory) to produce goods and services and generate revenue.
The total value of assets helps in calculating the net worth of a business (Assets Liabilities).
Long-term assets lose value over time. Accountancy records this loss through depreciation, which affects profit calculation.
Management uses asset information to decide on expansion, investment, replacement of old assets, or selling unused assets.
Proper asset recording is required to follow accounting standards, taxation laws, and auditing requirements.
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