BUSI 1003 Chapter Notes - Chapter 7: Income Statement, Retained Earnings, Fixed Asset
1 May 2014
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Chapter 7 - fixed assets and intangible assets. Is the purchased item (cost) long lived? a. b. If yes, the item is capitalized as an asset on the balance sheet as either a fixed asset or an investment (proceed to step 2) If no, the item is classified and recorded as an expense. Is the asset used in normal operations? a. b. If yes, the asset is recorded as a fixed asset. If no, the asset is recorded as an investment. * standby equipment for use during peak periods or when other equipment breaks down is still classified as a fixed asset even though it"s not used very often. Fixed assets that have been abandoned or are no longer used are no longer fixed assets. Fixed assets may be sold but, they should not be offered for sale as part of the normal operations.
