Question

(vii) The assets of a business can be classified as:
a) Fixed assets and current assets
of above
b) Only fixed assets
c) Only current assets
d) None​

Answer 1

The assets of a business can be classified as fixed assets and current assets.

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Answer 2

a) Fixed assets and current assets

• Assets can be classified into two categories Fixed Asset and Current Asset.
• Fixed Assets are those assets that are usually owned by the enterprise for a longer period of time, the conversion of cash takes time. It generates revenue. Fixed Assets are future-oriented and the business takes decisions while acquiring a fixed asset. Example - Plant and Machinery, Land and Building.
• Current Assets are those assets that are owned by the enterprise for a shorter period of time, these assets are converted easily. Current Asset helps in day-to-day operations. Example - Cash in Hand.