--23-- Sold to Thompson & Co., 94 Monroe St. 2,000 #1 plain ruled 35 cards 1.25 2.50 --24-- Received from Ackers & Co. 1 #35 section 5.50 (Damaged) --25-- Shipped to American Furniture Co. 1 #35 section 4.20 (Received in bad order) In the first demonstration, the footings of the sales and purchase books, as well as the returns entered in the journal, are posted to a merchandise account. It will be noted that the debit side of the merchandise account does not represent the actual purchases, and the credit side does not represent the sales. In the second demonstration, the purchase and sales accounts are used. Total sales are credited to sales account from purchase book, and returns credited from the journal. The balances of these accounts show actual net purchases and sales. [Illustration] [Illustration] [Illustration] CLASSES OF ASSETS =48.= Asset accounts are accounts representing resources or assets of the business. Assets are classified as _Fixed_; _Active_ or _Floating_; _Passive_ or _Speculative_; _Fictitious_. _Fixed assets_ are those permanent forms of property which are a necessary part of the equipment used for conducting the business--such as real estate, buildings, machinery, etc. _Active_ or _floating assets_ are those forms of property of which the quantity in our possession varies from day to day--as merchandise, accounts, cash, etc. _Passive_ or _speculative assets_ are those (_a_) whose values are not readily determined, or (_b_) whose values are subject to market fluctuations--as, for example, (_a_) franchises, copyrights, patents; (_b_) stocks, bonds, or other speculative securities. _Fictitious assets_ are those which are not represented by tangible property, or which are of value to a going business but would have no market value if the business were closed out or liquidated. These assets are frequently represented by an expense account on the books. The initial advertising expense necessary to launch the business successfully is frequently carried on the books as an asset. The amount of such advertising expense is spread over a stated period, a certain proportion being charged into the regular expense accounts each year until the entire amount is used. =49. Examples of Fixed Assets.= The assets of an ordinary mercantile business are of the first two classes only--fixed and floating. The most common forms of fixed assets of such a business are: _Real Estate_--generally understood to include land and buildings owned and used in the business. _Furniture and Fixtures_--represented by office and store furniture, shelving, counters, stoves, furnaces or other heating appliances, lighting fixtures. _Horses and Wagons_ or _Trucks_--including all horses, wagons, trucks, harness, or motor-cars used for hauling goods.