Multiple Choice
Which of the following types of accounting would be most effective in a small owner/manager-operated business?
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1. Introduction to Accounting
Types of Accounting
Multiple Choice
Which of the following is considered a long-lived productive asset?
A
Prepaid Insurance
B
Inventory
C
Accounts Receivable
D
Land
Verified step by step guidance1
Understand the concept of long-lived productive assets: These are assets that a company uses in its operations to generate revenue over a long period, typically more than one year. Examples include buildings, machinery, and land.
Analyze the options provided: Prepaid Insurance, Inventory, and Accounts Receivable are all current assets. Current assets are expected to be used or converted into cash within one year, so they do not qualify as long-lived productive assets.
Focus on Land: Land is a tangible asset that is not consumed or converted into cash within a short period. It is used in operations and has a long useful life, making it a long-lived productive asset.
Differentiate Land from other long-lived assets: Unlike buildings or machinery, land is not subject to depreciation because it does not wear out or become obsolete over time.
Conclude that Land is the correct answer: Based on the definition and characteristics of long-lived productive assets, Land fits the criteria and is the correct choice among the options provided.
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