Based on previous experience with Eclipse, the assets directory was also placed in the src/main/res directory when it was developed on Android Studio, with the following exception when the build occurred:
Executing tasks: [Clean,: app:generatedebugsources,: app:generatedebugandroidtestsources]configuration on Demand are an incubating feature.:app:clean:app:prebuild up-to-date:app:predebugbuild Up-to-date:app:checkdebugmanifest:app: PrepareDebugDependencies:app:compileDebugAidl:app:compileDebugRenderscript:app:generateDebugBuildConfig:app: Generatedebugassets up-to-date:app:mergedebugassets:app:generatedebugresvalues UP-TO-DATE:app: Generatedebugresources:app:mergedebugresources[fatal Error]: 1:1: No content is allowed in the preface.
Http://stackoverflow.com/questions/18302603/where-to-place-assets-folder-in-android-studio here is a good explanation for the problem.
Solution:
Move the assets directory to the src/main/ directory.
Android Studio Assets Error: Content not allowed in preface