Correct Answer:
C. Machinery
Explanation:
The correct answer is Machinery because fixed assets are long-term tangible properties that a business owns and uses in its operations to generate income over a period extending beyond one year.
- Machinery: This is the correct choice. Machinery is classified as a non-current or fixed asset because it is purchased for ongoing, long-term operational use and cannot be quickly or easily converted into cash within a standard twelve-month operating cycle. It is subject to depreciation over its useful economic life.
- Incorrect Options (Current Assets):
- Cash: This is incorrect. Cash is the most liquid asset and is classified as a current asset since it is immediately available for daily transactions.
- Inventory: This is incorrect. Inventory represents goods held for sale or manufacture, which a business expects to liquidate and convert into revenue within its current operating cycle.
- Receivables: This is incorrect. Accounts receivable are short-term lines of credit extended to customers that are expected to be collected in cash within a year, making them current assets.