AFB Fixed Assets and Current Assets are categorized as per concept of a.Time period b.Consistency

AFB Fixed Assets and Current Assets are categorized as per concept of a.Time period b.Consistency c.Going Concern. d.Separate Entity

 

Machinery,land,building etc. are primarily required for carrying out the production and selling ofCertain products. Going Concern Concept implies that these machinery,land,building, etc. continue to be used. These assets are expected to be with the concern for a long period of time for production and selling of end products that these assets are termed as ‘Fixed Assets’. Actually Going Concern Concept implies that the resources of the concern would continue to be used for the purposes for which they are meant to be used.

 

As per going concern, a business will servive to perpetuity. Fixed Assets are assets from which benefits will continue to drive for more than 1 year. Current assets are assets from which, under normal business circumstances, benefit will drive during the next 12 months. As every company has to follow mercantile system of accounting with going concern principle then "fixed" and "current" categorization is necessary.

 

Kindly share correct answer plz Anandrao Gaikwad sir