What is typically included in the assets section of a balance sheet?

The assets section of a balance sheet is primarily composed of current and fixed assets. Current assets are resources that are expected to be converted into cash or used up within one year, such as cash, accounts receivable, and inventory. They are crucial for assessing a company’s short-term financial health. Fixed assets, on the other hand, are long-term tangible assets that a company uses in its operations, like property, plant, and equipment (PPE). These assets are not intended for quick liquidation but are essential for the ongoing functions of the business.

Understanding this distinction between current and fixed assets is pivotal for anyone studying business acumen, as it provides insight into asset management and financial stability. The balance sheet serves as a snapshot of a company's financial condition, with the asset section illustrating what the business owns and how these resources are allocated.