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Which of the following are examples of fixed capital?Multiple select question.accounts receivablebuildingmachineryinventory

Question

Which of the following are examples of fixed capital?

  • accounts receivable
  • building
  • machinery
  • inventory
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Solution

To determine which of the provided options are examples of fixed capital, let's first understand the concept of fixed capital. Fixed capital refers to long-term assets that are used in the production process and are not expected to be consumed or converted into cash within a year. Fixed capital typically includes physical assets such as buildings, machinery, and equipment.

Now, let's evaluate the provided options:

  1. Accounts Receivable:

    • This represents money owed to a business by its customers. It is classified as a current asset, not fixed capital.
  2. Building:

    • A building is a long-term physical asset used in the production of goods or services. It is an example of fixed capital.
  3. Machinery:

    • Machinery is also a long-term asset used in the production process. It qualifies as fixed capital.
  4. Inventory:

    • Inventory consists of goods available for sale and is considered a current asset. It is not fixed capital.

Final Answer

The examples of fixed capital from the given options are:

  • Building
  • Machinery

This problem has been solved

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