A new Chief Executive Officer (CEO) is appointed to revive a chain of well-recognized superstores. The CEO wants to increase sales by introducing on-line shopping. Most stores are understaffed and…

Question

Options

• AStore maintenance expenses
• BBrand reputation
• CInterest mounting on bank loan
• DOnline shopping website

• A
  8% (5)
• B
  85% (52)
• C
  5% (3)
• D
  2% (1)

Explanation

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit1. Assets are reported on a company's balance sheet and are classified as current, fixed, financial, or intangible1. Among the four options given, only brand reputation can be considered an intangible asset, as it is not a physical or financial item, but rather a result of customer perception, recognition, and loyalty2. Brand reputation can generate cash flow, reduce expenses, or improve sales for a company by attracting and retaining customers, enhancing pricing power, and creating competitive advantage2. The other three options are not assets, but rather expenses or liabilities. Store maintenance expenses are costs incurred to keep the physical assets in good condition and working order3. Interest mounting on bank loan is the amount of money that a company owes to its lenders for borrowing funds4. Online shopping website is not an asset by itself, but rather a platform that may require investment and maintenance to operate and generate revenue. Therefore, the correct answer is brand reputation.

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