What is an Asset & Classification of Assets

You might have used the term ‘Asset’ many times in you life. The real meaning of assets in accounting concepts is “Assets are what the business owns”.Assets are the things of value owned by a business or economic resources of a business. Assets are business property and possessions such as cash, book debts or debtors ,stock, land and building ,furniture etc.

Assets are classified according to its nature as follows.

  1. Current Asset:- Assets that are in the form of cash or that can be converted into cash within a short period of time ( usually, twelve months) are known as current asset.
  2. Fixed Asset:- Fixed assets are assets assets of a relatively permanent nature which are used in the operation and are not intended to for a sale.
  3. Intangible Assets:- Certain assets have no material existence, they cannot be touched or seen.Such assets exist simple by means of book entry. example. Goodwill, patent,copyright.
  4. Fictitious asset:- These are not real asset but simply debit balances or losses carried forward from one accounting period to the next. For example advertising suspense account.
  5. Wasting assets:-Generally speaking all assets that lose value through wear and tear or constant use,as for example ,Plant and machinery are wasting assets. But the term is more appropriately used to refer only those assets which become exhausted through being worked,such as ,mines,quarries etc.

How to create Fixed Asset Ledger In Tally ERP 9.

Let’s create a fixed asset ledger in tally erp 9. Every business have assets and liabilities for its day today operation.Assets are economic resources of a company or things of value owned.The fixed assets are fixed and tangible in nature Fixed assets are long term assets.

Examples of Fixed Assets

  • Buildings
  • Computer equipment
  • Computer software
  • Furniture and fixtures
  • Intangible assets
  • Land
  • Leasehold improvements
  • Machinery
  • Vehicles

Fixed Asset ledger in Tally ERP 9

Tally erp 9 has a special group for creating fixed asset ledger called ‘Fixed Asset‘.All the fixed assets ledgers are placed under this group.Let’s create the some fixed asset ledger in tally erp 9.

How to create Fixed Asset Ledger in Tally example

To create a fixed asset ledger,for example Machinery Ledger, Go to

Gateway of tally>Accounting Info> Ledger >Create

Name: Machinery

Under: Fixed Asset

As shown in the below image.

How to create Fixed Asset Ledger In Tally ERP 9