An asset which can be used in the long term, e.g. A piece of machinery, is called?

An asset which can be used in the long term, e.g. A piece of machinery, is called?

• A. Current Assets
• B. Intangible Assets
• C. Cash
• D. Fixed Assets

Answer: (D)

A long-term, tangible item used in the business’s operations is a fixed asset. Fixed assets are physical resources that stay with the company for more than a year and help run production or provide services. A piece of machinery is a classic example because it’s durable, used over many years, and not intended to be sold in the ordinary course of business. This differs from current assets, which are expected to be turned into cash within a year (like cash or stock). Intangible assets are long-term but non-physical (such as patents or licenses), while cash is itself a current asset. So the term that best fits a long-term, tangible asset like machinery is fixed asset.

A long-term, tangible item used in the business’s operations is a fixed asset. Fixed assets are physical resources that stay with the company for more than a year and help run production or provide services. A piece of machinery is a classic example because it’s durable, used over many years, and not intended to be sold in the ordinary course of business.

This differs from current assets, which are expected to be turned into cash within a year (like cash or stock). Intangible assets are long-term but non-physical (such as patents or licenses), while cash is itself a current asset. So the term that best fits a long-term, tangible asset like machinery is fixed asset.