What are considered physical assets that a company uses in its operations?

The classification of fixed assets, which includes tangible items like land and buildings, is an essential concept in accounting. Physical assets are those that have a tangible presence and are utilized in the operations of a business to help generate revenue. These assets are often referred to as "property, plant, and equipment" (PP&E) and play a crucial role in the long-term growth and sustainability of a company.

Land and buildings fall under this category because they are not only physically present, but they also contribute directly to the company’s operations over an extended period. By providing the necessary space for activities such as manufacturing, storage, or office work, these assets enable a company to function efficiently.

In contrast, intangible assets, such as patents and trademarks, while valuable, do not have a physical form and are not used in the same capacity as fixed assets. Current liabilities represent obligations that a company must pay within a year, such as accounts payable, and thus do not pertain to physical assets. Cash and marketable securities are liquid assets that also do not involve physical presence, as they are financial instruments rather than operational assets.

Overall, the classification of fixed assets as physical assets underscores their importance in the operational framework of a business, reinforcing their value in contributing to