Fixed Assets

Expanded Explanation: Fixed assets are long-term tangible assets intended for use in the business rather than for resale. These assets play a key role in the production of income and are not easily converted into cash. Management of fixed assets includes the consideration of depreciation, maintenance, and disposal.

Potential Issues: Mismanagement or incorrect valuation of fixed assets can lead to inaccuracies in depreciation calculations and balance sheet reporting, impacting profit and tax calculations.

Example: The computers and furniture in your digital marketing agency are considered fixed assets.