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An example of a long-term asset is: Prepayments Trade receivable Property, plant and equipment Trade payable Rent Bank loan Inventory Cash

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An example of a long-term asset is:
Prepayments
Trade receivable
Property, plant and equipment
Trade payable
Rent
Bank loan
Inventory
Cash

An example of a long-term asset is: Prepayments Trade receivable Property, plant and equipment Trade payable Rent Bank loan Inventory Cash

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BridgetVeteran · Tutor for 11 years

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Property, plant and equipment

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## Step 1:<br />A long-term asset, also called a fixed asset or non-current asset, is property a firm owns, uses in its operations, and is not readily expected to convert into cash (consumed or sold) within a year. Examples of long-term assets include land, buildings, machinery, and equipment.<br /><br />## Step 2:<br />Examine each option given in the question and establish whether it is a short-term (current) asset or a long-term (non-current) asset.<br /><br />### Prepayments <br />Prepayments are usually considered as a current asset because they will likely gain benefits within a short period, typically a year. <br /><br />### Trade Receivables <br />Trade receivables are short-term assets because they are amounts customers owe a company for goods or services rendered. They are expected to turn into cash, generally in less than a year as the aim is to collect these payments speedily. <br /><br />### Property, Plant and Equipment <br />Property, Plant and Equipment, known as fixed assets, could expect usage over an extended period. Thus, they are categorized as long-term assets.<br /><br />### Trade payable <br />Trade payable refers to money owing by a company to its suppliers linked to the credit extended toward purchasing physical goods. They are short-term liabilities, not assets at all.<br /><br />### Rent <br />Rent can refer to income if the organization is the landlord or expenditures if located in a rented premise. It's neither a short-term nor a long-term asset, but it rather relates to operational revenues or expenditures.<br /><br />### Bank loan<br />A bank loan for a company refers to company liabilities. Intended as not obligatory to be paid back within a year, it's categorized as long-term liabilities if they don’t require settlement within a year, not an asset.<br /><br />### Inventory<br />Inventory, such as materials and finished goods, is a current asset since a company is likely to sell (turning into cash) or utilize it within a single quarter or business year. <br /><br />### Cash<br />Cash is the most liquid form a company has that can readily be used for diverse business operations. As it can be spent away at any time, it is deemed as a current asset.
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