Question

Which of the following are criteria for determining whether to record an asset as a fixed asset? a.must be short-lived and tangible b.must be an investment and long-lived c.must be tangible and an investment d.must be long-lived and used by the company in its normal operations

Answer 1

Answer:

The correct answer is letter "D": must be long-lived and used by the company in its normal operations.

Explanation:

Fixed assets are tangible resources used by a corporation to produce profits. To qualify as a fixed asset, the item can not be consumed or sold in less than one year and be part of the daily operations of the business. Fixed assets are listed on the balance sheet of the company and are subject to depreciation.

Examples of fixed assets include buildings, factories, leasehold improvements, computers, electronic hardware, furniture, automobiles, and construction equipment.