Which term describes non-current assets that generate benefits over many years?

Which term describes non-current assets that generate benefits over many years?

• A. Accounts receivable
• B. Current assets
• C. Fixed assets
• D. Intangible assets

Answer: (C)

The main idea is long-term, productive resources: non-current assets that continue to support operations for more than one year. Fixed assets are tangible resources like buildings, machinery, and equipment that a business uses over several years to produce goods or deliver services. Because their benefit lasts a long time, they are not intended for quick sale and are shown on the balance sheet at cost minus depreciation, reflecting wear and tear over their useful life. This distinguishes them from current assets, which are expected to be converted into cash or used up within a year (like inventories and accounts receivable). Intangible assets also provide long-term benefits but are non-physical (such as patents or goodwill) and are categorized separately from fixed assets. So, the term that best fits non-current assets that generate benefits over many years, in a tangible form, is fixed assets.

The main idea is long-term, productive resources: non-current assets that continue to support operations for more than one year. Fixed assets are tangible resources like buildings, machinery, and equipment that a business uses over several years to produce goods or deliver services. Because their benefit lasts a long time, they are not intended for quick sale and are shown on the balance sheet at cost minus depreciation, reflecting wear and tear over their useful life.

This distinguishes them from current assets, which are expected to be converted into cash or used up within a year (like inventories and accounts receivable). Intangible assets also provide long-term benefits but are non-physical (such as patents or goodwill) and are categorized separately from fixed assets. So, the term that best fits non-current assets that generate benefits over many years, in a tangible form, is fixed assets.