CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

A long-term asset is different from a long-term investment in stocks or subsidiaries primarily because a long-term asset ______
A. is used in operations and not for resale.
B. has physical substance.
C. is long-term in nature.
Explanation: The most correct statement is A. The primary difference between long-term assets and long-term investments in general is use in the operations of the business.

User Contributed Comments 3

User Comment
Rguerra Some long term assets might not have physical substance. Ex: Acquired patent.
gaetmichel explains why an "idle building" is not a long term asset, in aprevious question. considered as an investment
ascruggs92 Stock subsidiary investments can be long term in nature, and a subsidiary typically has physical substance (i.e. employees, office space, etc.). Only A can be correct.
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