Future Business Leaders of America (FBLA) Agribusiness Practice Test

Which of the following is NOT considered an asset?

1. A building owned by a business

2. Cash held in a savings account

3. A loan payable to creditors

4. Machinery used in production

The correct answer is: A loan payable to creditors

In the context of accounting and business, an asset is defined as a resource owned by a business that is expected to provide future economic benefits. The correct choice highlights that a loan payable to creditors does not fit this definition, as it represents a liability rather than an asset. Liabilities, such as loans, indicate the financial obligations a business has to repay debts. In contrast, the other options—such as a building, cash in a savings account, and machinery used in production—are all resources that the business owns and can use to generate revenue. Understanding the distinction between assets and liabilities is crucial for examining a company’s financial health. While assets contribute positively to the wealth of the company, liabilities represent debts that can affect financial stability.