An educational institute has decided to procure the following items:
1. Drum Set 2. Amplifier 3. Guiter etc.
The musical items indicated above are required for students amusement, entertainment or say for development of the students. Now, my question is- Are these assets or not? If asset then why? and If not then also for what reasons? Kindly specify the journal entry to be passed for purchase of such items.
15 February 2009
when you are getting benefit from any item for more than one accounting year then it is treated as an asset. Since these musical intruments will be used for more than 1 year they are assets.
Musical intrument A/c Dr. XXX To Cash / Bank A/c XXX
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