Question

Which of the following statements is true?

1. Tangible assets lack physical substance.
2. Tangible assets will be consumed in a year or less.
3. Tangible assets have physical substance.
4. Tangible assets will be consumed in over a year.

Answer 1

Correct Option: C. Tangible assets have physical substance.

Meaning of Tangible assets;

Tangible assets the name suggests assets which can be touched and seen. Thus it has physical substance.

Example: Land & building, Furniture, Equipments etc

Note:

For A: Tangible assets lack physical substance

Tangle assets having physcial substance. Thus this statement is incorrect

For B: Tangible assets will be consumed in a year or less.

Tangible asstes will be in businnes for long term. If the asset is to be consumed in a year then it would be recorded under Current assets.

Thus this statement is incorrect

For C: Tangible assets will be consumed in over a year.

As discussed, Tangible asset will conused over many years and not a year. It has long term life.

Thus this statement is incorrect