Agribusiness Library LESSON L060086: ASSETS AND LIABILITIES

Objectives 1. Define current assets and identify examples of current assets. 2. Define non-current (or long-term) assets and identify examples of non-current assets. 3. Define current liabilities and identify examples of current liabilities. 4. Define non-current (long-term) liabilities and identify examples of non-current liabilities.

Terms Accounts payable Accounts receivable Assets Buildings Capital assets Cash Current assets Current liabilities Interest on liabilities Land

Terms Liability Long-term leases Machinery Non-current (or long-term) assets Non-current (or long-term) liabilities Operating loans Pension funds Pre-paid expenses Principal balances on loan

Terms Principal payments on non-current liabilities Rent payments Stocks Taxes Wages

 _________ are items that an individual or business owns that can be listed on a financial statement.  ________________are items that an individual or business owns that can be sold to generate cash quickly.  Examples of current assets include:  A.Cash___________________________________ ________________________________________  Estimated cash value can also be applied to stored grain, market livestock, and other agriculture products, such as hay or straw.

 B. Stocks —shares of capital that an individual or business can own and resell.  ______________________________________________ ______________________________________________ __________________________________  C. __________________—income an individual or business is expecting to receive for products or services.  D. Pre-paid expenses — _________________________________________ _________________________________________ _________________________________________

 ______________________________are products and inventory an individual or business owns that will be used for more than one calendar year.  Examples of non-current (or long-term) assets are:  A._______________________________________ ____________________________.  B. Buildings —permanent structures that are owned by an individual or business.  ______________________________________________ _____________________________________________

 C. Machinery — ____________________________________________  Examples of machinery include trucks, tractors, sprayers, ATVs, lawn mowers, irrigation equipment, or any other types of equipment.  D. _______________—include any personal assets that are used for business purposes that will last for more than one year.  _________________________________________________  E. ___________________or other long-term investments—money deposited with a financial institution to create a retirement fund.  __________________________________________________ __________________________________________________

 ____________refers to money owed for a product or service.  _________________are items that must be paid within the next year.  Examples of current liabilities are:  A. ____________________—bills that are owed to businesses or individuals within the current operating year.  ______________________________________________

 B. Operating loans — _________________________________________ _________________________________________ _________________________  C. Taxes —money owed to the government.  ______________________________________________ ______________________________________________ ___________________________.  D. Rent payments —money owed to owners of property in exchange for the use of their land, buildings, pasture, or other __________________.

 E. ________________—money owed to financial institutions in exchange for money borrowed.  F. _____________________________________— the initial payment for items that are purchased within the current year.  The value of the capital item will be classified as a non- current asset, whereas the remaining value owed on the item is a non-current liability.  G.Wages__________________________________ _________________________________

 Non-current (or long-term) liabilities __________________________________________ __________________________________________  Examples of non-current (or long-term) liabilities include:  A. ________________________—agreements made with property owners where money is owed to the owner in exchange for the use of the property.  B. ________________________(for land, buildings, machinery, or other capital items)—the total amount of money left over on a loan that must be paid before ________________________.

REVIEW What are current assets and what are some examples of current assets? What are non-current (or long-term) assets and what are some examples of non-current assets?

REVIEW What are current liabilities and what are some examples of current liabilities? What are non-current (or long-term) liabilities and what are some examples of non-current liabilities?