Final answer:
In the context of business accounting, fixed assets include long-term tangible assets like buildings, trucks, and land. Accounts receivable is not a fixed asset, as it is money owed to a company by customers and expected to be received within the operating cycle.
Step-by-step explanation:
The question focuses on understanding which items qualify as fixed assets in a business context. Fixed assets are long-term tangible assets that a company uses in its operations and which are not expected to be converted to cash within a year. They include items such as buildings, trucks, and land, which represent significant capital investments and are utilized by a business over several years. On the other hand, accounts receivable is not a fixed asset, but rather represents money owed to the company by customers for goods or services delivered or used but not yet paid for.
Many physical items that people buy and may sell later, like a house, land, art, or other collectibles, can be considered fixed assets. However, not all goods are assets, as some can be inventory or short-lived consumable goods. For example, a local moving company might have almost no fixed costs if it rents trucks by the day, contrasting with a computer chip manufacturer that needs an expensive factory as a fixed asset.
It is important to distinguish between fixed assets and current assets like accounts receivable, as they play different roles on a company’s balance sheet and have different implications for financial analysis and reporting.