In addition to Asset being a very funny word to say and spell, it is also the thing you want to accumulate the most of. I know….eewwwwwaaa!
In the financial world though, an Asset is something of monetary value that you own.
So, what has monetary value? Well, first of all, your money of course! The cash you have collected in your savings account is an Asset. You can exchange that money for stuff. Money is the easiest Asset to understand.
We play Monopoly as a family quite a bit right now. The property you buy in the game is an Asset. You buy it and you own it, but for the right price, someone could buy it from you.
In reality, if you owned a piece of property, like a house, the same thing would apply. That house is an Asset you could sell for cash. In turn, you could then use that cash to buy other stuff.
The electric Razor scooter you got for Christmas is an Asset. You own it but you could sell it for money if you wanted to.
The Assets we are going to talk about the most in this blog are as follows:
There are a few other types of Assets but I’ll let you learn about those in your first accounting class.
That’s it. You now understand what an Asset is! LOL, I said Asset…..
Fell free to drop that knowledge at your next sleepover.