Future Business Leaders of America (FBLA) Agribusiness Practice Test

Which of the following is an example of fixed assets?

1. Cash in hand

2. Accounts receivable

3. Office furniture and equipment

4. Goods in inventory

The correct answer is: Office furniture and equipment

Fixed assets are long-term tangible assets that a business uses to generate revenue and are not expected to be converted into cash within a single year. They typically include items such as buildings, machinery, vehicles, and office equipment. Office furniture and equipment fit this description perfectly, as they are physical items used in the operations of a business over an extended period. These assets do not get sold in the ordinary course of business and are instead used to support the daily functioning and profitability of the organization. In contrast, cash in hand represents liquid assets that can be readily used for transactions, accounts receivable are claims for payment from customers, and goods in inventory are items intended for resale. All of these are classified as current assets as they are more easily converted into cash or consumed within a year, distinguishing them from fixed assets.