What are fixed assets in a company?

Fixed assets, often referred to as long-term assets or non-current assets, represent the resources that a company needs for its operational continuity and are not consumed in the short term. These assets include property, plant, equipment, and machinery, which are essential for the company to conduct its business activities and generate revenue over an extended period.

The defining characteristic of fixed assets is their long-term nature; they are not intended to be sold quickly or converted to cash like current assets. Instead, they provide ongoing value to the company and are typically depreciated over time on the financial statements to reflect their usage and wear and tear. This depreciation is recorded as an expense, aligning with the matching principle of accounting.

The other answer choices describe various types of assets that do not encapsulate the notion of fixed assets. For instance, assets that are quickly consumed or sold do not fit the profile of fixed assets, as they are usually classified as current assets. Similarly, while assets produced for profit can include fixed assets in some cases, they do not exclusively signify fixed assets, making that option too broad. Lastly, assets that are solely for investment purposes might refer to financial investments rather than operational tools, thereby categorizing those differently from fixed assets essential for everyday operations.

Thus,