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In accounting the term capital assets refers to an asset that is usually held for the purpose of contributing to earnings for a business over a long period of time.

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What is the effect on accounting equation if assets increases?

accounting equation assets = liabilities + capital so if assets increases either liability or capital will increase for this purpose 1. assets means both long term assets and short term assets 2. capital means owners equity 3. liability means outsliders liability


What do you mean by equity in finance?

Equity in finance refers to the residual value of assets. The term equity can also be used in association with accounting.


What is fixed and working capital?

Fixed capital is something that is need for long term ...working capital is the capital or funds for managing and carrying out day to day operations. Apart from this a important point to note is that usually fixed assets or long term assets of the company are bought from fixed capital. Buying short term current assets from funds for long term would be illogical.


What is the accounting definition of capitalized?

The accounting definition of capitalized is a method used to delay the recognition of expenses by recording the expense as long-term assets. Basically you write off the cost of what you're currently doing or purchasing and instead think of the long term capital you will gain from the product or service.


What is short term liability and long term assets?

Short term liabilities are those whose life is less than 12 months. Long term assets: I presume you mean either long term liabilities (whose life is greater than 12 months) or long term assets is the value of a company's property, equipment and other capital assets minus depreciation.


Traditional accounting term used to record owner's investment?

capital


What is the difference between long term capital gain and short term capital gain?

The main difference between long-term capital gains and short-term capital gains is the length of time an asset is held before it is sold. Long-term capital gains are from assets held for more than one year, while short-term capital gains are from assets held for one year or less. The tax rates for long-term capital gains are typically lower than those for short-term capital gains.


Are accounts receivable a capital assets?

No, capital assets are listed as PP&E (Property, Plant, & Equipment). An account receivable is either a current asset or a long-term asset, not a capital asset.


How to calculate the current ratio in accounting?

The current ratio in accounting is calculated by dividing a company's current assets by its current liabilities. This ratio helps assess a company's ability to cover its short-term debts with its current assets.


How can one determine the current ratio in accounting?

The current ratio in accounting can be determined by dividing a company's current assets by its current liabilities. This ratio helps assess a company's ability to cover its short-term debts with its current assets.


What are the differences between fixed assets and other assets in terms of their characteristics and accounting treatment?

Fixed assets are long-term assets that are used in the operations of a business, such as buildings and equipment, while other assets are typically short-term assets like cash and inventory. Fixed assets have a physical form and are not easily converted to cash, while other assets are more liquid. In terms of accounting treatment, fixed assets are recorded on the balance sheet at their historical cost and depreciated over their useful life, while other assets are typically recorded at their current market value.


Working capital formula?

The formula for calculating working capital is: Working Capital = Current Assets - Current Liabilities. It represents a company's ability to cover its short-term obligations with its current assets. A positive working capital indicates that a company has enough assets to cover its liabilities, while a negative working capital may suggest liquidity issues.