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Simple English definitions for legal terms
capital assets
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A quick definition of capital assets:
Capital assets are things that a business owns, like equipment, property, and money. They are important because they help the business make money and grow. For example, a restaurant needs a kitchen and tables to serve food, and a store needs shelves and cash registers to sell products. These things are all capital assets.
A more thorough explanation:
Definition: Capital assets refer to the equipment, property, and funds that a business owns and uses to generate income.
Examples:
- A manufacturing company's machinery and equipment
- A restaurant's building and kitchen appliances
- A software company's patents and copyrights
These examples illustrate how capital assets are essential to a business's operations and revenue generation. Without these assets, a business may not be able to produce goods or services, resulting in a loss of income and potential failure.