Which item would be considered an asset for a sporting goods store?

Which item would be considered an asset for a sporting goods store?

• A. Hockey sticks
• B. Mini ice rink for testing skates and pucks
• C. The contract with the hockey equipment bag supplier
• D. The owner's deposit of $60,000 to get things up and running

Answer: (A)

Assets are resources a business owns that will provide future benefits. For a sporting goods store, items held for sale are assets because they represent value the store can convert into cash through selling. Hockey sticks fit this perfectly: they are tangible products owned by the store and are intended for resale, making them a current asset (inventory) on the balance sheet. The mini ice rink used for testing would only be an asset if the store actually owns it and uses it in operations, but it’s not the typical example of inventory that directly generates sales like the sticks do. The contract with the supplier isn’t an asset; it’s a contractual arrangement that creates future rights or obligations, not a resource the store owns. The owner’s deposit represents equity—funding provided by the owner—not an owned asset of the business.

Assets are resources a business owns that will provide future benefits. For a sporting goods store, items held for sale are assets because they represent value the store can convert into cash through selling. Hockey sticks fit this perfectly: they are tangible products owned by the store and are intended for resale, making them a current asset (inventory) on the balance sheet. The mini ice rink used for testing would only be an asset if the store actually owns it and uses it in operations, but it’s not the typical example of inventory that directly generates sales like the sticks do. The contract with the supplier isn’t an asset; it’s a contractual arrangement that creates future rights or obligations, not a resource the store owns. The owner’s deposit represents equity—funding provided by the owner—not an owned asset of the business.