Which of the following is an example of a fixed asset?

• A. Office building
• B. Accounts receivable
• C. Inventory
• D. Cash

Answer: (A)

Verified step by step guidance

1. Understand the concept of fixed assets: Fixed assets are long-term tangible assets used in the operations of a business and are not expected to be converted into cash within a year. Examples include buildings, machinery, and equipment.
2. Analyze each option provided: Office building, Accounts receivable, Inventory, and Cash.
3. Determine the nature of each option: Office building is a tangible asset used in operations and has a long-term purpose, making it a fixed asset. Accounts receivable, Inventory, and Cash are current assets, as they are expected to be converted into cash or used within a year.
4. Confirm the classification: Fixed assets are typically recorded on the balance sheet under property, plant, and equipment (PP&E). Office building fits this classification.
5. Conclude that the correct answer is 'Office building' because it meets the criteria of a fixed asset, while the other options are classified as current assets.