Which of the following is a financial asset?Answer : Machinery Intangible assets Loan receivable Prepayments
Question
Which of the following is a financial asset?
- Machinery
- Intangible assets
- Loan receivable
- Prepayments
Solution
The financial asset among the options provided is the "Loan receivable".
Here's why:
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Machinery: This is a physical asset, not a financial one. It's a tangible item that a company uses in its operations.
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Intangible assets: These are non-physical assets, such as patents, copyrights, and trademarks. While they have value, they are not considered financial assets.
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Loan receivable: This is indeed a financial asset. When a company or individual lends money to another entity, the promise of repayment (usually with interest) is considered a financial asset.
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Prepayments: These are payments made in advance for goods or services that will be received in the future. While they represent a form of asset, they are not classified as financial assets.
So, the correct answer is "Loan receivable".
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