Which term refers to assets that will be held for more than one year?

• A. Assets
• B. fixed assets
• C. current assets
• D. liabilities

Answer: (B)

Assets that will provide value for more than one year are called fixed assets (also known as non-current assets). These long-term resources are used in the business’s operations and aren’t expected to be converted to cash within the next 12 months. Think of buildings, machinery, and long-term equipment, plus intangible items like patents or software licenses, all of which contribute to the business over several years. This distinguishes them from current assets, which are intended to be used or turned into cash within a year, such as cash, accounts receivable, and inventory. Liabilities, on the other hand, are obligations the company owes, not resources. Since the term needs to specify the long-term nature of the asset, fixed assets is the most accurate label.