Long-lived property used to run the business — vehicles, equipment, buildings.
Fixed assets (property, plant & equipment) are long-lived things the business owns and uses to operate — vehicles, machinery, computers, furniture, buildings. They're capitalized on the balance sheet rather than expensed, then depreciated over their useful lives.
Not everything is a fixed asset: inventory is held for sale, supplies get consumed, and small purchases usually get expensed outright under a practical dollar threshold set by policy (tax rules also offer immediate-expensing elections — a tax-professional conversation). A simple fixed-asset list with dates and costs makes depreciation, insurance, and eventual disposal far easier.
A $4,000 laptop-and-camera kit for a video business is capitalized as equipment and depreciated; the $30 memory cards are just supplies expense. When the kit is later sold for $1,200, the books compare that to remaining book value to record a gain or loss.
Depreciation · Balance Sheet · Cost of Goods Sold (COGS) — or browse the full plain-English glossary.
Reading a definition is the easy part — the Daily Challenge (ten questions a day, free, no signup) is how terms like this become reflexes. Going for certification? Start with the free ProAdvisor readiness check.