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CBSE Class 11-commerce Answered

Shri Mohan, a businessman has employed Shri Sujit who comes from tribal area of West Bengal and has estimated his value at t11,00,000. He has acc6unted it as an asset in the books of accounts. Is he correct in doing so? Give reason in support of your answer with value involved in this.
Asked by tripathianshika2001 | 07 Mar, 2019, 12:19: PM
answered-by-expert Expert Answer

As per the properties of an asset, an asset should have the following characteristics:

  1. Should be owned by the business.
  2. Can be tangible or intangible.
  3. Should have value attached.
  4. Should be capable of being measured in money terms.

Since, Mohan has employed Sujit, it cannot be said that Mohan owns Sujit. Also, valuing a human resource does not mean that it has been measured in terms of money. Therefore, based on the above features of an asset, classifying Sujit as an asset in the books of accounts is not correct.

Answered by Surabhi Gawade | 07 Mar, 2019, 02:26: PM

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