What are considered 'fixed assets'?

Fixed assets refer to long-term tangible properties that a company uses in its operations to generate income over an extended period. These assets are not intended for resale; instead, they provide ongoing value to the business. Examples of fixed assets include buildings, machinery, land, and vehicles.

These assets typically have a useful life of more than one year and are subject to depreciation, which is the process of allocating the cost of the asset over its useful life. Recognizing fixed assets correctly is crucial for accurate financial reporting, as they significantly impact a company's balance sheet and cash flow considerations.

Understanding that fixed assets are long-term investments meant to support a company’s revenue-generating capabilities helps clarify why this option is the correct choice in the context of accounting definitions. The other options describe different types of assets or liabilities that do not fit the characteristics of fixed assets.