Question

Which of the following is not true with regard to fixed assets?

• A. They are acquired for using them in the conduct of business operations
• B. They are not meant for resale to earn profit
• C. They can easily be converted into cash
• D. Depreciation at specified rates is to be charged on most of the fixed assets

Answer 1

The correct option is C They can easily be converted into cash

Assets are classified as Current Assets and Fixed Assets.

Fixed Assets are those which are of permanent nature and these exists in the business for a long duration. Like Land & Building, Plant & Machinery etc. These assets can not be converted in to cash so easily.

Current Assets are evolve during the process of business. These are fluctuating and changes with each business transaction. Like Inventory, Sundry Debtors, Cash and Bank balances.