Harvard University • ACCOUNTING • ACCOUNTING-MGMT- 1300 •

Determine the characteristics of the asse…

Question
Answered step-by-step

Asked by DeanGrouse2470

Determine the characteristics of the assets given below: ....

Determine the characteristics of the assets given below:

:
 Image transcription text
Real Assets Financial Assets 1. Patents
O 2. Lease obligations 3. Customer
goodwill 4. A college educ... Show more

BUSINESS ACCOUNTING FINANCIAL ACCOUNTING

ACCOUNTING MGMT- 1300

Answer & Explanation

:
 Solved by veriOed expert

Answered by jdmariamonte

1. Patent - Real asset

2. Lease obligation - Financial asset
3. Customer goodwill - Real asset
4. College education - Real asset
5. A $5 bill - Financial asset
6. Machinery - Real asset
7. Preferred stocks - Financial asset
8. Call option - Financial asset
9. Real estate - Real asset
10. CertiYcate of deposits - Financial asset

Step-by-step explanation

Approach to solving the question:

Financial assets are assets or resources that can be easily converted to
cash. It has a monetary value, but the value cannot be realized until it is
exchanged to cash. On the other hand, real assets are tangible or
intangible assets that can generate revenue or future in^ow of
resources. It carries an intrinsic value due to their physical substance
and/or properties.

Detailed explanation:
1. Patent - Real asset (patents are considered real asset as it is utilized by
the company to generate income)
2. Lease obligation - Financial asset (this is a Ynancial asset as it involves
settlement involving cash)
3. Customer goodwill - Real asset (goodwill is an intangible asset that
form part of the total assets of the company)
4. College education - Real asset (education is considered a real asset
as it is something not convertible to cash but can provide future in^ow of
beneYts to the individual)
5. A $5 bill - Financial asset (a dollar bill is a form of money which is a
cash)
6. Machinery - Real asset (tangible asset that is utilized by the company
:
 to generate income or mobilize operations)
7. Preferred stocks - Financial asset (stocks are common examples of
Ynancial asset)
8. Call option - Financial asset (call options are Ynancial contract which
give the option buyer the right but not the obligation to buy a stock, bond,
commodity, or other asset or instrument at a speciYed price within a
speciYc time period.
9. Real estate - Real asset (tangible asset that is utilized by the company
to generate income or mobilize operations)
10. CertiYcate of deposits - Financial asset (certiYcate of deposits are
also a form of cash equivalent, hence considered as a Ynancial asset)

Key references:
https://smallbusiness.chron.com/Ynancial-vs-real-asset-79865.html
https://www.oreilly.com/library/view/caia-level-
ii/9781118447284/OEBPS/c23-sec1-0002.htm

10
Search z
Is this answer helpful?
Question Answer & Explanation Related Questions Related Courses
Helpful Unhelpful •
:
 Related Answered Questions

Q . Partial-Year Depreciation: Straight-Line Q Use Kimberly-Clark's Ynancial

and Double Declining Balance Sandblasting statement to answer the following
equipment acquired at a cost of $8 questions. Kimberly-Clark makes Kleenex
tissues and

Answered over 90d ago Answered over 90d ago

100%

Related Course Resources

ACCOUNTING 403 ACCOUNTING MISC

Harvard University Harvard University
5925 Documents 3117 Documents

325 Question & Answers 2 Question & Answers

Company Get Course Hero

About Us iOS

Careers Android

Leadership Chrome Extension

Sitemap Tutors

Q&A Archive

Educator Events
:
 Study Tools Help

AI Homework Help Contact Us

Flashcards FAQ

Feedback

Legal Connect with Us

Copyright Policy College Life

Academic Integrity Facebook

Our Honor Code Twitter

Privacy Policy LinkedIn

Terms of Use YouTube

Attributions Instagram

Copyright © 2023. Course Hero, Inc.

Course Hero is not sponsored or endorsed by any college or university.
: