Assets refer to financial value of a possession. Possessions in business can be physical in nature such as a vehicle or in the form of paper such as cash or contractual rights. Assets are generally reported in the upper half of a balance sheet.

Bookkeeping – Controls in Accounting (Lesson 95)

Controls in Accounting

Just as manufacturing uses controls to ensure quality of product, controls are used in accounting to generate accurate information, maintain security over assets and comply with Generally Accepted Accounting Standards. The company implements various controls to assure accurate and timely information. 

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Return on Assets

Return on Assets

One of the performance ratios used in business identifies the overall ability of management to efficiently utilize resources to generate a profit.   Corporate resources include human knowledge/skills and the balance sheet assets of the business.   The labor component is unquantifiable in terms of dollars, but assets with a dollar value associated with them are reflected on the balance sheet.   The return on assets measures management’s ability to earn a profit  on these balance sheet assets.

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