Question

In each case, identify whether the item is an asset. What criteria or characteristics determine whether an item is classified as an asset?

Answer 1

An asset is an item of value that is owned and provides future economic benefits. Ownership, value, and future benefits are criteria used to classify an item as an asset. Examples of assets include houses, land, art, rare coins or stamps, and collectibles like paintings, fine wine, jewelry, antiques, or baseball cards.

Step-by-step explanation:

An asset is an item of value that a firm or an individual owns. To determine whether an item is classified as an asset, we consider certain criteria or characteristics. Some of the criteria include:

1. Ownership: The item must be owned by the individual or firm.
2. Value: The item must have a monetary value.
3. Future Benefits: The item must provide future economic benefits to the owner.

Using the examples given, a house, land, art, rare coins or stamps, and collectibles like paintings, fine wine, jewelry, antiques, or baseball cards can all be classified as assets as they meet the criteria mentioned above.