Which of the following is an example of property, plant and equipment?

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Multiple Choice

Which of the following is an example of property, plant and equipment?

Property, plant and equipment are long-term tangible assets used in the operation of a business. They are not cash or investments, and they are not items intended for sale in the ordinary course. Land fits into PPE because it is a physical asset used in the business’s ongoing activities and is expected to provide value over many years. It is recorded at cost and, unlike buildings or machinery, is not depreciated generally because it has an unlimited useful life, though it can be impaired if its value falls. The other options—cash, short-term investments, and trade receivables—are current assets, expected to be converted to cash or settled within a year, and thus do not form part of property, plant and equipment.

Property, plant and equipment are long-term tangible assets used in the operation of a business. They are not cash or investments, and they are not items intended for sale in the ordinary course. Land fits into PPE because it is a physical asset used in the business’s ongoing activities and is expected to provide value over many years. It is recorded at cost and, unlike buildings or machinery, is not depreciated generally because it has an unlimited useful life, though it can be impaired if its value falls. The other options—cash, short-term investments, and trade receivables—are current assets, expected to be converted to cash or settled within a year, and thus do not form part of property, plant and equipment.

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