Examples Of Furniture And Fixtures In Accounting
When it comes to accounting for businesses, there are many different types of assets that need to be accounted for. Furniture and fixtures are two such assets that are commonly found in businesses. In this article, we will explore what furniture and fixtures are, why they are important, and provide examples of them in accounting.
What Are Furniture And Fixtures?
Furniture refers to the movable objects that are used in a business for functional purposes, such as chairs, desks, and tables. Fixtures, on the other hand, are items that are attached to the building and cannot be moved without damaging the building, such as lighting fixtures, plumbing fixtures, and built-in cabinetry.
Both furniture and fixtures are considered tangible assets, meaning that they have a physical form and can be touched and felt. They are also considered long-term assets, as they are expected to provide value to the business for more than one year.
Why Are Furniture And Fixtures Important?
Furniture and fixtures are important assets for businesses for several reasons. Firstly, they are essential for the day-to-day operations of the business. Without furniture and fixtures, employees would not have the necessary tools to perform their jobs, such as desks to work at or lighting to see by.
Secondly, furniture and fixtures are considered assets on the balance sheet of a business. This means that they are recorded as a valuable resource of the business and can be used to generate income or be sold for a profit. As a result, it is important for businesses to accurately account for their furniture and fixtures to ensure that their financial statements are accurate.
Examples Of Furniture And Fixtures In Accounting
Here are some examples of furniture and fixtures that businesses may have, and how they are accounted for:
Office Furniture
Office furniture includes desks, chairs, filing cabinets, and other fixtures that are used in an office setting. These items are typically considered a fixed asset, as they are expected to last for more than one year. They are recorded on the balance sheet at their original cost and are depreciated over their useful life.
Restaurant Fixtures
Restaurant fixtures include booths, tables, chairs, and other items that are used in a restaurant setting. These items are typically considered a fixed asset, as they are expected to last for more than one year. They are recorded on the balance sheet at their original cost and are depreciated over their useful life.
Retail Store Fixtures
Retail store fixtures include display cases, shelving units, and other items that are used in a retail setting. These items are typically considered a fixed asset, as they are expected to last for more than one year. They are recorded on the balance sheet at their original cost and are depreciated over their useful life.
Manufacturing Equipment
Manufacturing equipment includes machinery, tools, and other fixtures that are used in a manufacturing setting. These items are typically considered a fixed asset, as they are expected to last for more than one year. They are recorded on the balance sheet at their original cost and are depreciated over their useful life.
Conclusion
Furniture and fixtures are important assets for businesses, as they are essential for day-to-day operations and are valuable resources that can be used to generate income. By accurately accounting for furniture and fixtures, businesses can ensure that their financial statements are accurate and reflect the true value of their assets.