Which of the following best defines an Asset?

An asset is best defined as an item of useful or valuable property. This definition encompasses a wide range of resources that a person or entity owns and can use to generate value, such as cash, real estate, equipment, and inventory. Assets are essential in accounting as they represent what a company or individual owns and are a key component of the balance sheet.

In contrast, the other options describe concepts that are not assets themselves. A liability refers to an obligation or debt that an individual or company owes to others, which is the opposite of an asset. Depreciation is a method used to allocate the cost of a tangible asset over its useful life and does not define what an asset is. Finally, an agreement in a business transaction pertains to contracts or terms of engagement between parties, which may involve assets but does not itself define an asset. Thus, the focus on the definition of an asset as valuable property directly aligns with the nature of what constitutes an asset in financial terms.