Question

ACC105

chapter 7

Continuing with our previous Discussion Boards, you have "created" a retail business (CH4 DB).

List 3 items you will need to run your business and then categorize each of those items as a Fixed Asset or a Current Expense (or if it makes sense an Intangible Asset).

Answer 1

Items one need to run a RETAIL BUSINESS

1. Place /Building: One must require a Place/Building to run any Form od Business

The Place May be either OWNED or LEASE

if The Place is OWNED then the Asset is classified as FIXED ASSET - TANGIBLE

If the Place to run the business is LEASED then The lease rights over the period of lease will be an INTANGIBLE ASSET

Ex: Land, Building

2. FURNITURE and EQUIPMENT to Run The Business: (Basic Equipment such as Cash Registers, Security cams, Alarms, Anti-theft Equipment, Fire Safety Equipment)

The furniture/equipment may be either OWNED or LEASE

if the furniture/equipment is OWNED then the same is classified as FIXED ASSET - TANGIBLE

If the furniture/equipment to run the business is LEASED then The lease rights over the period of lease will be a FIXED ASSET - INTANGIBLE

3. Employees / Staff: One Should Need employees or staff to run the business. One Should Pay The Employees a fixed Salary/wages either on Day Basis or Monthly basis - The Employees/Staff related expenses are treated as Current Expenses

4. Services/Provisions: Such as Electricity, Internet, Telephone, Water - one should Pay for these services at regular intervals usually on a monthly basis these are also classified as Current Expenses