Understanding Assets and Resources

What is the definition of an asset?

• An asset is a type of debt that must be repaid.

• An asset is a liability that incurs future costs.

• An asset is a temporary resource with no economic value.

• An asset is a resource owned by an individual or entity that is expected to provide future economic benefits.

How are assets generally classified?

• Fixed assets and liquid assets

• Current assets and non-current assets

• Tangible assets and intangible assets

• Operational assets and financial assets

What is a key feature of current assets?

• Liquidity and short-term conversion to cash.

• Low risk and high interest rates

• Inflexibility and long-term conversion to cash

• High profitability and long-term investment

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

• Equipment

• Real estate

• Cash

• Inventory

What type of asset is cash considered?

• Intangible asset

• Liquid asset

• Non-liquid asset

• Fixed asset

What is an intangible asset?

• A type of liability that reduces a company's worth.

• An asset that has no value to a business.

• An intangible asset is a non-physical asset that provides value to a business.

• A tangible asset that can be physically touched.

How do fixed assets differ from current assets?

• Fixed assets are used for trading, current assets are for investment.

• Fixed assets are long-term, current assets are short-term.

• Fixed assets are always liquid, current assets are illiquid.

• Fixed assets have a lifespan of one year, current assets last indefinitely.

What is the purpose of classifying assets?

• To organize and manage assets effectively.

• To reduce the number of assets owned.

• To hide assets from stakeholders.

• To increase the value of assets.

Which asset is expected to be converted to cash within a year?

• Intangible assets

• Long-term investments

• Current assets

• Fixed assets

What is an example of a financial asset?

• Stocks

• Commodities

• Real estate

• Bonds