Assets may be differentiated into :

1. Fixed Assets. — Fixed assets are those which form a permanent
and essential part of the business carried on, such as real estate, machinery,
land and plant of a mine, road-bed and rolling stock of a railroad, etc.
2. FivOATiNG Assets. — Floating assets are those which vary from day
to day from sale, realization, or exchange, etc., such as stock-in-trade, cash,
accounts and notes receivable, land of a real estate company, etc.
3. Speculative Assets. — Speculative assets are those which fluctuate
in value from day to day — such as stocks, bonds, and "futures" in different
kinds of products dealt in by the exchanges.
Such assets as patent rights, good will and advertising devices are more
or less speculative, the latter often losing their entire value the moment a
business is suspended or closed out.
We will not under this heading take into consideration what are called
wasting assets, as they will receive special attention under the headings of
depreciation, good will, patent rights, etc., but it is convenient here to men-
tion some of the ordinary items of a balance sheet. It should be borne in
mind that any inaccuracies in estimating the proper value of assets on a
balance sheet, directly affects the profits of a business, and while it is quite
unusual to find the assets of a business underestimated, it is unfortunately
common to find them inflated above their actual value in order to make a
better showing of the results of a year's transactions.
