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Examples assets could be factory could be buildings could be Motor Vehicles and of course cash as I said anything that can provide future economic benefits do you agree that the items in front of you provide benefits to a company now look at the diagram I want you to spend a few minutes take a pencil and paper and write for each whether you think it’s an asset or not stop this recording do this and then we can proceed I’ll give you a couple of minutes to do this what did you say let’s take the first one cash is an asset if you said asset you got it land is an asset retained earnings is not an asset the answer’s no retained earnings.

Let me repeat is not an asset they are the cumulative earnings of the business they are treated as part of equity we’ll come to that later patent is an asset they don’t look like assets but they are assets this is because they do provide future economic benefits to a company what about the next one buildings is an asset not payable is not an asset let me repeat no not an asset it’s actually the opposite payable means you owe money you don’t get money so it’s a liability and we’ll talk about that later.

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