Which of the following is an example of a long-term asset?

Which of the following is an example of a long-term asset?

• A. Inventory
• B. Land
• C. Cash
• D. Accounts Receivable

Answer: (B)

Land is classified as a long-term asset because it is not intended to be converted into cash or consumed within a single operating cycle or accounting period. Long-term assets, also known as fixed assets or non-current assets, are resources that a business expects to hold and use for more than one year. They play a crucial role in the company's operational capacity and are often essential for generating future revenue. Land, unlike inventory, cash, or accounts receivable, is not a current asset. Inventory is typically purchased for short-term purposes, cash is a liquid asset available for immediate use, and accounts receivable represent amounts owed to the business that are expected to be converted to cash soon, usually within the next year. Thus, all of these options represent assets that are more temporary in nature, while land is a permanent resource for the company.

Land is classified as a long-term asset because it is not intended to be converted into cash or consumed within a single operating cycle or accounting period. Long-term assets, also known as fixed assets or non-current assets, are resources that a business expects to hold and use for more than one year. They play a crucial role in the company's operational capacity and are often essential for generating future revenue.

Land, unlike inventory, cash, or accounts receivable, is not a current asset. Inventory is typically purchased for short-term purposes, cash is a liquid asset available for immediate use, and accounts receivable represent amounts owed to the business that are expected to be converted to cash soon, usually within the next year. Thus, all of these options represent assets that are more temporary in nature, while land is a permanent resource for the company.