Florida General Contractor Practice Exam

Which of the following is not considered a fixed asset?

1. Office furniture

2. Construction equipment

3. Cash reserves

4. Land ownership

The correct answer is: Cash reserves

Fixed assets are long-term tangible properties that a business owns and uses in its operations to generate income. They are typically not intended for sale in the regular course of business and are expected to provide benefits over an extended period. Cash reserves, in this context, do not qualify as fixed assets because they are liquid and can be readily used or converted to cash. Unlike office furniture, construction equipment, and land ownership—which are all physical assets with a long-term use in the business—cash reserves are considered current assets, as they can be quickly accessed and utilized for immediate operational needs or investments. In contrast, office furniture is a fixed asset because it is a tangible property used in the office environment to facilitate business operations. Similarly, construction equipment represents significant capital investment, providing utility over an extended period, and land ownership is also a fixed asset, as it is a permanent resource used for conducting business activities.