Having five chiropractic tables, how should these items be recorded in the books?

Having five chiropractic tables, how should these items be recorded in the books?

• A. Asset
• B. Expense
• C. Liability
• D. Revenue

Answer: (A)

Long-term equipment used in the practice is recorded as an asset because it represents a resource the business owns that will provide economic benefits beyond the current year. Five chiropractic tables are durable items used to deliver services over multiple periods, so they belong on the balance sheet as property/equipment rather than being expensed all at once. Initially you capitalize their cost by debiting an asset account (like Equipment or Furniture and Fixtures) and crediting cash or accounts payable. Over time, you depreciate the asset to allocate the cost across its useful life, recording depreciation expense and reducing the asset’s book value. They’re not a liability since there’s no ongoing obligation, and not revenue since they aren’t income. They aren’t an expense because the benefit extends beyond the current period.

Long-term equipment used in the practice is recorded as an asset because it represents a resource the business owns that will provide economic benefits beyond the current year. Five chiropractic tables are durable items used to deliver services over multiple periods, so they belong on the balance sheet as property/equipment rather than being expensed all at once. Initially you capitalize their cost by debiting an asset account (like Equipment or Furniture and Fixtures) and crediting cash or accounts payable. Over time, you depreciate the asset to allocate the cost across its useful life, recording depreciation expense and reducing the asset’s book value. They’re not a liability since there’s no ongoing obligation, and not revenue since they aren’t income. They aren’t an expense because the benefit extends beyond the current period.