If it is purchased or manufactured for the purposes of resale it is a current asset. Current liabilities are amounts owed to suppliers for goods and services purchased on credit terms and which have to be paid within twelve months of the balance sheet date. Long term liabilities are amounts owed which have to be repaid after an interval of time which is longer than twelve months after the balance sheet date. These are called loans and in the case of limited companies are sometimes referred to as debentures. Capital is made up of capital introduced which is cash and any other assets introduced by the owners.
Capital grows when profits are made and is reduced when assets are withdrawn by the owner.
This withdrawal is referred to as drawings unless the business is a limited company in which case it is referred to as a dividend or distribution of profits. It is usually a much larger business than the first two types and the financial controls operating to safeguard company assets and accounting records are expected to be much more sophisticated. The public company has many owners and shares can be purchased and sold on the stock exchange. The private company is owned by a small number of shareholders and shares can not be traded publicly on the stock exchange. This is no accident and is always true because of a principle known as the balance sheet equation.