How is the account for fixtures and fittings or motor vehicles at cost classified?

The account for fixtures and fittings or motor vehicles at cost is classified as an asset account. This classification is based on the nature of these items, which are tangible fixed assets. Assets represent resources owned by a business that can provide future economic benefits. When a company purchases fixtures and fittings or motor vehicles, these items are intended for long-term use in the business operations and hence are recorded as assets on the balance sheet.

The cost of these assets is capitalized, meaning the expenditure is recorded as an asset rather than being immediately expensed. Over time, the business will allocate the cost of these assets as depreciation, reflecting their usage and wear over time. This accounting treatment underscores their role in supporting business operations, thereby enhancing the company's capacity to generate revenue in the future.

The other classifications do not apply in this context. A liability account would represent obligations or debts the business owes to others, a capital account typically involves the owner’s equity in the business, and an expense account records costs incurred during a period that do not provide future economic benefits. All these types of accounts have different purposes and implications for the financial statements, distinguishing them from asset accounts.