What does the term 'assets' refer to in a balance sheet?

In the context of a balance sheet, the term 'assets' specifically refers to items owned by the company. These assets can include cash, accounts receivable, inventory, property, plant, equipment, and investments, among other things. They represent the resources that a company utilizes to generate revenue and are essential for its operational capacity. Assets are listed on the balance sheet and are classified into current assets (which are expected to be converted into cash or utilized within one year) and non-current assets (which provide value to the business over a longer period).

Understanding assets is crucial for analyzing a company’s financial condition, indicating its ability to meet obligations, invest in growth, and navigate financial challenges. The other options do not accurately describe assets; for example, costs incurred relate to expenses rather than ownership, money owned by shareholders represents equity, and outstanding debts are liabilities, not assets.