Question

loose tools are required to be shown under
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Answer 1

Answer:

Loose tools always come under current asset.

Answer 2

Loose Tools are Current Asset which is posted on the left side of a balance sheet and are known as Assets.

Why is Loose Tool said to be a current asset?

• Current assets are expected to easily convert into cash that is done within a financial year.
• Some of the current assets are cash equivalents, cash, stock inventory, marketable securities, accounts receivable, other liquid assets, and pre-paid liabilities.
• Loose tools are a part of the machinery as their lifetime is limited and also have less monetary value.
• Loose tools cannot stay permanently in a business and so it is called a current asset.