Question

Prepare ledger account
purchase of non current asset on n cash​

Answer 1

Non-current assets are assets whose benefits will be realized over more than one year and cannot easily be converted into cash. The assets are recorded on the balance sheet at acquisition cost, and they include property, plant and equipment, intellectual property, intangible assets, and other long-term assets.

The following are the key categories of non-current assets:

1. Tangible Assets

Tangible assets refer to assets with a physical form or property that are owned by a company and are central to its core operations. The recorded value of a tangible asset is its original acquisition cost less any accumulated depreciation.

However, not all physical assets are depreciated. Assets, such as land, are held at cost even though they tend to appreciate in value. Depreciation is a non-cash notation that reduces the value of an asset over time.

2. Intangible Assets

Intangible are assets that lack a physical form but offer economic value to the company. Examples of such assets include goodwill and intellectual property, such as trademarks, patents, and copyrights.

A company can acquire intangible assets from another entity or create them from within the business. The assets created by the business lack a recorded book value and are, therefore, not recorded on the balance sheet.