Future Business Leaders of America (FBLA) Agribusiness Practice Test

What type of assets does not depreciate or is not valued at $100 or more?

1. Current assets

2. Non-depreciable assets

3. Fixed assets

4. Intangible assets

The correct answer is: Non-depreciable assets

Non-depreciable assets are types of assets that retain their value over time and do not undergo depreciation, unlike fixed assets which typically do depreciate. Common examples of non-depreciable assets include land and certain types of natural resources that have indefinite useful lives. These assets are recorded on a balance sheet at their original cost and do not require regular write-downs to reflect a decrease in value. In contrast, current assets, which are expected to be converted to cash or used up within one year, may not necessarily fit the description of not depreciating at all. Fixed assets, such as machinery and buildings, generally do depreciate as they are subject to wear and tear over time. Intangible assets, like trademarks and patents, can also have a finite useful life and can undergo amortization, which shares similarities with depreciation but pertains specifically to intangible items. Thus, non-depreciable assets stand out because they are not subject to these value adjustments, making them a distinct category in asset classification.