Introduction to Asset Accounts
One can subdivide assets into many accounts based on their predicted holding periods and their nature. However, such a task can be challenging for those who are unfamiliar with accounting. To save you from this, you should hire an accounting firm in Johor Bahru to help you with the accounts that are related to your assets. Below are some of the popular groups of asset accounts and the accounts people will typically use in each category (Also see assets classification):
- Land. It involves the value of all land a firm possesses. This account does not undergo depreciation.
- Buildings. This includes the expense of construction or purchase of all buildings the firm owns.
- Office equipment. For example, fax machines, printers and scanners and copiers.
- Computer equipment. It may consist of both computer equipment and costly software packages.
- Furniture and fixtures. This comprises of all furniture the firm owns.
- Machinery. It includes the cost of conveyors, production equipment, and so on.
- Vehicles. This involves all vehicles like forklifts, lorries and any other related equipment.
- Accumulated depreciation. As an asset contra account, it shows the cumulative total of the amount of depreciation charged on your fixed assets.
- Merchandise inventory. These are goods that you have bought from the vendors in a condition where they are ready for sale.
- Raw materials inventory. These are materials that you need to convert them into their form by undergoing the manufacturing process (Also see Accounting for Manufacturing Businesses).
- Work-in-progress inventory (Also see Introduction to Cost Accounting). It includes goods which you are turning them into products that you can sell.
- Finished goods inventory. These are items which you have manufactured and now in a ready-for-sale condition.
- Cash. This includes petty cash and bills.
- Bank deposits. For example, the cash you keep in your depository accounts.
- Prepaid expenses (Also see Accounting for Prepayments). These are any prepaid amounts which you have not consumed, for example, insurance premiums, prepaid rental, as well as advertising.
- Trade accounts receivable. This only includes receivables from the clients of the firm.
- Other accounts receivable. It can consist of various miscellaneous receivables, particularly the advances you paid to officers and your employees.
- Marketable securities. It comprises of both equity and debt securities, provided that you can liquidate them in a short time.
- Other current assets. You may put any minor items which are not grouped into any of the accounts above in it.
- Trademarks, patents, and copyrights. It includes the expenses you have incurred to acquire these assets.
- Domain names. It comprises of the amount that you have paid in the process of getting Internet domain names.
- Goodwill. This includes the acquisition cost of an organisation, minus the fair value of all the assets that you can identify.
- Accumulated amortisation. As a contra account, it shows the cumulative total of the amount of amortisation which is charged against all your intangible assets.