Fundamental Payroll Certification (FPC) Practice Exam

What type of asset includes land, buildings, and vehicles?

1. Tangible

2. Intangible

3. Current

4. Liquid

The correct answer is: Tangible

Tangible assets are physical assets that can be observed and touched. They include items like land, buildings, machinery, and vehicles, which are all categorized as tangible because they have a physical presence and can be used in the operation of a business. These types of assets typically play a crucial role in a company's operations, providing the necessary infrastructure for business activities. For example, buildings can house operations, land can be used for expansion or production, and vehicles may be essential for transportation or logistics. In contrast, intangible assets, such as patents or trademarks, do not have a physical form and cannot be touched. Current assets, on the other hand, are those that are expected to be converted to cash or used within one year, which can include cash, inventory, or accounts receivable but do not specifically refer to the physical assets like land and vehicles. Liquid assets refer to any assets that can quickly be converted into cash, which primarily pertains to cash itself or cash-equivalents rather than physical property. Hence, tangible is indeed the correct classification for assets that include land, buildings, and vehicles.