What are assets?

Assets are defined as resources owned by an individual or entity that have economic value. This is an essential concept in financial literacy because understanding what constitutes an asset is crucial for managing personal finances and evaluating an entity's financial health.

Assets can include a variety of items such as cash, real estate, investments, and equipment. They can generate value over time, either through appreciation or the ability to generate income. Recognizing assets is fundamental for budgeting, investment planning, and understanding overall net worth.

In contrast, options like expenses, liabilities, and cash on hand present different financial concepts that do not accurately capture the broader definition of what an asset is. Expenses are costs incurred and do not directly equate to economic value in the same way assets do. Liabilities represent obligations or debts, which stand in opposition to assets. Cash on hand refers specifically to liquid assets but does not encompass the full range of asset types available to an individual or entity. Thus, the option that defines assets as resources owned with economic value best reflects their role in personal and business finance.