The correct answer is: C. Both A and B
A balance sheet is a financial statement that reports a company’s assets, liabilities, and equity at a specific point in time. Assets are things that a company owns and expects to benefit from in the future. Liabilities are things that a company owes to others. Equity is the difference between a company’s assets and liabilities.
Tangible assets are physical objects that a company owns and expects to benefit from in the future. Examples of tangible assets include cash, land, buildings, equipment, and inventory.
Fictitious assets are assets that have no physical substance but that have value to a company. Examples of fictitious assets include goodwill, patents, and trademarks.
Both tangible assets and fictitious assets are shown on a balance sheet. Tangible assets are listed on the asset side of the balance sheet, and fictitious assets are listed on the liability side of the balance sheet.
Here is a more detailed explanation of each option:
- A. Tangible asset
A tangible asset is a physical object that a company owns and expects to benefit from in the future. Examples of tangible assets include cash, land, buildings, equipment, and inventory.
Cash is money that a company has on hand or in a bank account. Land is the physical property that a company owns. Buildings are structures that a company owns, such as office buildings, factories, and warehouses. Equipment is machinery and other equipment that a company owns, such as computers, tools, and vehicles. Inventory is the goods that a company has on hand for sale to customers.
- B. Fictitious asset
A fictitious asset is an asset that has no physical substance but that has value to a company. Examples of fictitious assets include goodwill, patents, and trademarks.
Goodwill is the value of a company’s reputation and customer base. Patents are legal rights that give a company the exclusive right to use an invention for a certain period of time. Trademarks are words, phrases, symbols, or designs that a company uses to identify its products or services.
- C. Both A and B
Both tangible assets and fictitious assets are shown on a balance sheet. Tangible assets are listed on the asset side of the balance sheet, and fictitious assets are listed on the liability side of the balance sheet.
The asset side of the balance sheet shows the things that a company owns. The liability side of the balance sheet shows the things that a company owes to others. The equity side of the balance sheet shows the difference between a company’s assets and liabilities.