Page 153 - Account 10

i. Fixed/Permanent or Long Term Assets
The assets, which have more than one year’s life and used in the business permanently
up to their economic life are known as fixed or permanent assets. The following are the
examples of this sort of assets:

Land and building Plant and machinery Furniture and fitting
Motor vehicles Business premises Factory shed
Lease holds Tools and equipments Livestock
Carts and horses Lorries
ii. Intangible Assets
The assets, which do not have physical existence but are purchased by a firm at a
monetary price for using special rights or reputations of others, are intangible assets.
These are taken as assets in legal grounds. The examples of such assets are:
Goodwill Patent right Copyright Trade marks

iii. Fictitious Assets
The assets, which do not have real existence but taken as assets in technical grounds
are known as fictitious assets. The large amount of expenditure on some revenue headings
for more than one year’s period and the capital losses are the examples of fictitious assets.
Generally, deferred revenue expenditures like advertisement, development expenses
preliminary expenses, research and development expenses survey expenses etc. are
fictitious assets. A certain portion of such an expenditure is charged in profit and loss
A/c of the current year and the remaining balance is regarded as asset at that date and
this process goes onward until it is totally charged in the profit and loss A/c.
Besides, capital losses like discount on issue of shares, discount on issue of debentures
etc. are also, treated as fictitious assets.

iv. Investment Assets
Investment assets refer to the investment in other companies by purchasing their
shares or debentures and also loan given to others on condition of getting dividend or
interest there from.

v. Current Assets/ Floating Assets
Current assets, also, termed as circulating assets, are those assets, which are either
in hard cash form or supposed to be converted into cash within an accounting year, are
known as current assets. These are not of permanent nature. Such assets are frequently
changed from one form to another in course of business dealing. The examples of such
assets are:
Cash Bank Debtors
Trade debtors Stock Bills receivables (B/R)
Notes receivables (N/R) Accrued income Pre-paid expenses
Accounts receivable (A/R) Marketable securities
Stores and spare parts Loose tools

152 Aakar’s Office Practice and Accountancy - 10 Final Accounts 153