Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

Which of the following is included as an asset?

1. Debts owed

2. Equity owned

3. Inventory held

4. Future expenses

The correct answer is: Inventory held

An asset is typically defined as a resource owned by an individual or entity that is expected to provide future economic benefits. In this case, inventory held represents tangible products or goods that a business has available for sale. This is classified as an asset because it can be converted into cash when sold, contributing to a firm's revenue. Debts owed are liabilities, as they represent obligations that need to be paid to others, thereby decreasing overall value. Equity owned refers to the ownership value in an asset after subtracting liabilities, but it is not an asset in itself; rather, it's a measure of ownership value. Future expenses are not considered assets either, as they represent future outflows of resources and do not provide economic benefits until incurred. Therefore, inventory held stands out as a clear example of an asset, embodying the potential to generate revenue when utilized in business operations.