A Fixed Asset is defined as which of the following?

A Fixed Asset is defined as which of the following?

• A. An asset which a company has owned for at least one year. For example a delivery van or machinery
• B. A short term asset that will be owned less than a year, e.g., stock
• C. An amount owed by a business to someone else, e.g., bank loans
• D. Money received from sales

Answer: (A)

Fixed assets are long-term tangible items the business uses in its day-to-day operations and keeps for more than one year rather than for resale. They form part of non-current assets and are typically depreciated over their useful life to spread their cost across the periods they help generate income. A delivery van or machinery are classic examples because they’re used over several years to support the business’s activities. The other descriptions refer to different kinds of items: stock is a current asset, amounts owed by the business to others are liabilities (like loans), and money from sales is income.

Fixed assets are long-term tangible items the business uses in its day-to-day operations and keeps for more than one year rather than for resale. They form part of non-current assets and are typically depreciated over their useful life to spread their cost across the periods they help generate income. A delivery van or machinery are classic examples because they’re used over several years to support the business’s activities.

The other descriptions refer to different kinds of items: stock is a current asset, amounts owed by the business to others are liabilities (like loans), and money from sales is income.