What is meant by the term assets

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The owner of a small business selling and repairing cars which you patronise has just received a copy of his accounts for the current year. He is rather baffled by some of the items and as he regards you as a financial expert, he has asked you to explain certain points of difficulty to him. This you have readily agreed to do. His questions are as follows:

(a) What is meant by the term "assets"? My mechanical knowledge and skill is an asset to the business but it does not seem to have been included.

(b) The house I live in cost £130,000 five years ago and is now worth £360,000, but that is not vincluded either.

(d) Why do amounts for "vehicles" appear under both non-current asset and current asset headings?

(e) Why is the "bank and cash" figure in the statement of financial position different from the profit for the year shown in the statement of profit or loss?

(f) I see the statement of profit or loss has been charged with depreciation on equipment, etc. I bought all these things several years ago and paid for them in cash. Does this mean that I am being charged for them again?

Reference no: EM131385883

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