Question 2

a) A\

b) B

c) Fixed Asset, An asset with a long-term useful life that a company uses to make its products or provide
its services. Strictly speaking, a fixed asset is any asset that the company does not expect to sell for at
least a year, but the term often refers to assets a company expects to have indefinitely. Common
examples of fixed assets are real estate and factories, which a company holds for long periods of time.
Items on a company's balance sheet—the tangible property used in the business and not for resale;
would include buildings, furniture, fixtures, equipment, and land. Permanent Current Assets, The
minimum level of current assets that a firm needs to continue operation. Because some level is always
maintained, they are called permanent current assets. The current assets a firm needs in order to
continue operations. Examples include inventory and perhaps rapidly depreciating assets such as
computers. These assets are current because they do not remain assets for longer than a year, but they
are permanent because they must be replaced with similar assets. Despite the seeming contradiction in
the name, they are called permanent current assets because every company must permanently maintain
a certain amount in current assets in order to exist.