Computer of a firm should be classified asa)Fictitiousb)Liquid assetsc)Fixed assetsd)Current assetsCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

Computer of a firm is a fixed asset because it is purchased for continued use in the business. And some more examples of fixed assets are land and building, plant and machinery, motor vehicles, furniture etc. Hope this helps and if any other confusion arises,. ask freely.

Answer

Fixed asset... because cannot be converted into cash easily...

Answer

Computer is a asset. It's price is high and it's value is more then normal machine and it is used for more then 1 accounting year.

Answer

Fixed assets:

Fixed assets are long-term tangible assets that are used in the production of goods or services in a business. These assets are not meant for resale but are essential for the operation of the business. Computers used by a firm fall under this category as they are necessary for day-to-day operations and are not intended for immediate sale.

Classification:

Computers are classified as fixed assets because they provide long-term value to the business by improving efficiency, productivity, and overall operations. These assets have a useful life of more than one accounting period and are not easily converted into cash. Therefore, they are considered part of the firm's fixed assets.

Significance:

Proper classification of computers as fixed assets is crucial for accurate financial reporting and analysis. Fixed assets are recorded on the balance sheet and depreciated over their useful life to reflect their decreasing value over time. This classification helps in determining the true financial position of the firm and assessing its overall performance.

Conclusion:

In conclusion, computers used by a firm should be classified as fixed assets due to their long-term nature, essential role in business operations, and significance for financial reporting. Proper classification of these assets ensures transparency and accuracy in the firm's financial statements.

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