Q.Classify the following into Assets, Liabilities, Revenue or Expense:

Closing stock is stock in trade held at year end and is a current asset because it is meant for sale and conversion into cash within one operating cycle.

Assets are classified by how long they are held and how quickly they turn into cash:

• Fixed assets are held long term for use in the business (machinery, buildings).
• Intangible assets have no physical form (goodwill, patents).
• Fictitious assets are not real assets at all — they are unwritten-off losses/expenses (e.g. preliminary expenses).
• Current assets are held for a short period and are readily convertible into cash — cash, debtors, bills receivable, and stock/inventory. …

Machinery is a tangible asset while the other three are intangible assets, so the odd one out is (d).

Assets are classified by physical form:

• Intangible assets have no physical existence but carry value — examples: goodwill, patents, copyrights, trademarks.
• Tangible assets have a physical form and can be seen and touched — examples: machinery, buildings, furniture, stock. …

Goodwill is an intangible asset, so the answer is (c).

Goodwill is the monetary value attached to the reputation, brand and customer loyalty of a business — the extra earning power that lets it earn more than a similar new firm. Because it cannot be seen or touched yet clearly has value, it is classified as an intangible asset.

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The owner's initial investment in a business is called Capital.

When a business commences, the owner brings in cash and/or goods to start operations. This amount is recorded as Capital in the books, representing the owner's equity (claim) on the assets of the business — it is a liability of the business towards the owner under the accounting equation Assets = Liabilities + Capital. Assets (what the business owns), Liability …

Goodwill is the intangible asset in the list.

Assets are classified as tangible (having physical existence, e.g. Stock, Building, Furniture — all of which can be seen and touched) and intangible (no physical existence but still valuable, e.g. Goodwill, Patents, Trademarks). Goodwill represents the reputation and earning capacity a bu …

Bills Receivable is a Current Asset.

Assets are classified by how long they are expected to be held or converted to cash. Current assets (cash, debtors, bills receivable, stock) are expected to be converted into cash or consumed within one accounting year (normally 12 months). A Bill Receivable is a short-term claim against a debtor who has accepted a bill of exchange, and it …