Final answer:
It is true that assets like cash and supplies are valuable because they can be used to acquire other assets or for business operations. Cash serves as financial capital, not direct capital, but is essential for obtaining resources needed to generate income and value.
Step-by-step explanation:
True, assets such as cash and supplies have value because they can be used to acquire other assets or be used to operate a business. In the context of business and economics, an asset is an item of value that a firm or an individual owns.
Cash provides a simple example of an asset, but despite being money, it serves a different role. Money itself, in the form of coins and currency in circulation, acts as a medium of exchange and a store of value, but it is not considered capital because it cannot be used directly to produce goods.
However, a business can use cash to purchase capital, such as equipment and machinery, or other forms of financial capital like stocks and bonds, which in turn can be employed to generate income and value for the business.
Assets also include physical items that may be purchased and sold, such as a house, land, art, rare coins, or stamps. These items are assets because they can be converted into cash or used to acquire something else of value.
The importance of assets in business operations is highlighted in financial documentation like a balance sheet, which lists a company's assets and liabilities, reflecting the company’s net worth or equity. Hence, it is accurate to state that assets that can be utilized directly or indirectly in the acquisition or operation of a business have intrinsic value.