Answered: How can we determine the Acquisition of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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How can we determine the Acquisition of Fixed Assets?

Expert Solution

Step 1 Meaning of Fixed assets

Fixed Assets- Fixed Assets are those assets which are acquired for the purpose of:

production or supply of goods or ,
Services for Long term use,
for rental purpose to others
Administration purpose

Here , "Fixed " means those assets which are not to be consumed or sold within a year having physical presence used by the companies for the generation of income. These assets cannot be converted into cash easily .

For Example:Land , Furniture , Building etc.

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