Which of the following is an example of a fixed asset?

• A. Inventory
• B. A piece of machinery
• C. Accounts receivable
• D. Bank balance

Answer: (B)

Fixed assets are long-term resources used in running the business, kept for more than a year and not intended for sale in the ordinary course. They provide value over time and are usually shown on the balance sheet as non-current assets. A piece of machinery fits this because it is used in production, lasts many years, and is depreciated over its useful life. The other options are current assets: inventory are goods held for sale, accounts receivable is money owed by customers, and a bank balance is cash. These are expected to be converted to cash or used up within a year. So the machinery is the fixed asset.