Define 'assets' in accounting.

Assets in accounting are defined as resources owned by a business that have economic value. This definition highlights the fundamental role of assets in the financial structure of a company, as they are used to generate revenue and provide future economic benefits. Assets can take various forms, such as cash, inventory, property, equipment, and investments, all of which are expected to contribute to the business's profitability.

Recognizing assets is crucial because they are listed on the balance sheet and represent the company's resources available for use in its operations. This plays a vital role in assessing the financial health and operational capacity of a business. Understanding the nature of assets is essential for accounting, as it informs how businesses manage their resources and calculate their net worth after liabilities are taken into account.