which of the following asset is non - current assets? a) Debenture discount b) Frenchise c) Bills receivables d) Debtors
Answers
Answer:
b. Franchise
Explanation:
Franchising is a special type of agreement. So, franchising rights are of the franchisor. So, it is an intangible non current asset because for giving franchising rights, the franchisor gets fees.
What are non-current assets?
In order to be a non-current/fixed one, an asset must satisfy the following three characteristics:
(i) The asset which has been acquired not for resale
(ii) The asset which has a comparatively long life, i.e. it must not be converted into cash or consumed in the ordinary course of business within a period of one accounting cycle
(iii) The asset which helps the process of production, supply of goods and services.
Example -- Land, Machinery, Furniture
What are current assets?
Current assets are all the assets of a company that are expected to be sold or used as a result of standard business operations over the next year. Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets.
Hope that helps!