Which of the following is classed as a fixed asset?

• A. Cash at bank
• B. Inventory
• C. Accounts payable
• D. Premises

Answer: (D)

Fixed assets are long-term, tangible resources a business uses in its operations and expects to keep for more than one year, not for resale. Premises—the buildings and land the business uses—fit this description because they support activities over many years. In contrast, cash at bank is a current asset since it’s liquid and used for day-to-day operations; inventory is also current because it’s held for sale or consumption in the near term; accounts payable is a liability, not an asset. So the item classed as a fixed asset is premises.