What are examples of noncurrent assets?

Noncurrent assets are long-term investments that a company expects to hold onto for more than one year. Examples of noncurrent assets include things like buildings, machinery, vehicles, and land. These assets are vital for the production process or the delivery of services, as they are used over a long period.

Buildings and equipment fall into this category because they are not intended for immediate sale or consumption; rather, they provide value over time as they are utilized in the company’s operations. They often require significant capital investment and are depreciated over their useful lives, reflecting their long-term nature and the gradual allocation of their cost.

The other options mention items that do not meet the criteria for noncurrent assets. Cash and supplies are considered current assets because they are expected to be used or converted to cash within a year. Accounts payable, on the other hand, isn't an asset at all but a liability—money that the company owes to others. Lastly, utilities and salaries are expenses that are incurred on a regular basis and do not represent assets held by the company. Thus, the correct identification of noncurrent assets clearly points to buildings and equipment.