Question

(A) Long Answer Type Questions 1. What do you mean by Assets ? Explain its various Types.
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Answer 1

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Assets are economic resources of an enterprise that can be usefully expressed in monetary terms.Assets are items of value used by the business in its operations.e.g., Super Bazaar owns a fleet of trucks,which is used by it for delivering foodstiffs; the truck,thus , provide economic benefit to the enterprise. This item will be broadly classified into two types.

i) Fixed Assets-Fixed assets are those assets which last for a long period of time or the benefit of those assets are availed considerably long period more than a year.In this way,fixed assets are assets held on a long term basis,such as land, buildings,machinery,plant,furniture and fixtures.These assets are used for the normal operations of the business.

ii) Current Assets -Current assets are those assets which get converted into cash with in an operating cycle generally one year.In this way,current assets are assets held on a short term basis such as debtors (accounts receivable), bills receivable (notes receivable),stock (inventory), temporary marketable securities, cash and bank balances.

Explanation:

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