Which of the following describes a fixed asset?

A fixed asset is primarily characterized as a long-term tangible asset that a business uses in its operations to generate revenue. Unlike current assets, which are expected to be converted into cash or used up within a year, fixed assets like buildings, machinery, and equipment typically have a longer useful life, often extending over several years. They are integral to the day-to-day functioning of a business, providing the necessary infrastructure and tools for production or service delivery.

This classification is important in accounting, as fixed assets are reported on the balance sheet and are subject to depreciation, reflecting their use and aging over time. By distinguishing fixed assets from other types of assets like current obligations or financial investments, businesses can better manage their resources and assess their economic health.

In contrast, long-term intangible assets like copyrights and patents do not have physical substance, while current obligations pertain to liabilities due within a year. Financial investments held for trading involve assets like stocks or bonds, which do not form part of the operational base of a business. Thus, the proper definition of a fixed asset as a long-term tangible asset used in operations accurately aligns with its role and treatment in accounting practices.