Which of the following best describes an asset?

An asset is best described as a resource owned by an entity. This definition encompasses various forms of assets, such as tangible items like machinery, buildings, and inventory, as well as intangible items like patents and trademarks. Assets represent a future economic benefit and are critical for the operational capabilities of a business.

In contrast, a debt obligation refers to amounts that an entity owes, which is not something it owns; therefore, it cannot be classified as an asset. Financial liabilities, likewise, represent debts or obligations rather than resources owned. An expense incurred relates to costs that a company has already consumed to generate revenue, which impacts equity but does not constitute an asset. Thus, the definition of an asset fundamentally revolves around its capacity to provide future economic benefits to the entity that owns it.