Assets are anything the business owns or offers for sale. Which option best fits this definition?

• A. Debts owed by customers
• B. Obligations to suppliers
• C. Cash and inventory
• D. Profit from operations

Answer: (C)

Assets are resources the business owns that have future economic value and can be used in operations or sold to generate value. Cash and inventory fit this idea directly: cash is an immediate resource the company owns, and inventory are goods it holds for sale. Both are classic examples of assets on the balance sheet because they represent value controlled by the business that can be used now or converted into cash through sale.

Debts owed by customers are indeed assets (receivables) since they are money owed to the business, but they’re claims rather than physical resources the business currently uses or sells. Obligations to suppliers are liabilities, not assets. Profit from operations is income, not an asset.