Which of the following is not included in the definition of an asset:
a. SAPS Building in Sunnyside
b. ABC shares listed on the JSE
c. A coin
d. Ford Motor car
The correct answer and explanation is:
The correct answer is a. SAPS Building in Sunnyside.
An asset is something that is owned or controlled by an individual, organization, or entity and has economic value that can be used to generate future benefits. These benefits could be in the form of cash flow, utility, or market value. Assets are classified into various categories, such as current assets, non-current assets, tangible and intangible assets, depending on their nature.
- ABC shares listed on the JSE are considered financial assets. These are easily tradable and represent ownership in a company, which could yield dividends or capital gains. Shares are liquid, meaning they can be converted to cash relatively quickly.
- A coin is also considered an asset, particularly if it has intrinsic value (such as collectible coins, gold coins, etc.). Coins can be used as a store of value or as currency, depending on the context.
- A Ford Motor car is a physical asset, more specifically a tangible asset. It is a depreciating asset, as vehicles lose value over time, but it still holds economic value and can be sold or used as collateral for loans.
The SAPS Building in Sunnyside is not considered an asset in the context of this question because it is likely owned by the South African Police Service (SAPS), a government entity. Generally, assets that are owned by public entities like government buildings do not fall under the ownership of private individuals or companies, and therefore, they are not typically considered “assets” for those entities. Instead, they are considered public property or infrastructure and are not classified as personal assets.