Learning Goal: I’m working on a accounting question and need the explanation and answer to help me learn.
The following are the classification of assets for Balance Sheet purpose
1) Fixed Assets:.
Fixed assets are permanent in nature and acquired for the purpose of earning revenue and not for resale.
Fixed assets are further classified into tangible and intangible fixed assets.
a) Tangible Fixed Assets :
Tangible assets are having physical existence.
Example : Land , Building, Plant and Machinary, furniture and fixtures, tools and dies and motor vehicle.
b) Intangible Fixed Assets:.
Intangible assets are not having physical existence. We cannot see the assets.
Example : Goodwill,patents ,trade mark and copyright.
2) Wasting Assets:
Assets which are depreciated in value or content rapidly than the other fixed assets are called as wasting assets .
Example : Mines , Quarries,oil well and natural gas.
3) Fictitious Assets:
Fictitious assets are expenses and Losses which are temporarily capitalised,until written off to profit and loss account. These assets will not have any value.
Example: Advertising, preliminary expenses, brokerage, underwriting commission, discount on issue of shares and debentures.
