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Question 1
Part A
Coastal Couriers Entity Sole Trader is in the business of delivering documents and packages in all regions in Namibia using its fleet of delivery vans. Coastal Couriers Entity's head office is located in Windhoek. It operates a fleet of five delivery vehicles. Because of increase demand for its delivery services prior to the summer school holidays and the need for an additional delivery vehicle, it has rented a delivery vehicle for three months at a cost of N$ 40 000. The business wants to recognise the rented vehicle as an asset in the financial records of the business.
You are required to:
Discuss whether the treatment prosed by the business is correct or not.
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