Question

Which of the following does not describe intangible assets?

A) The lack physical existence
B) They are financial instruments.
C) They provide long-term benefits
D) They are classified as long-term assets.

Answer 1

Intangible assets are not financial instruments; they include items with legal rights or intellectual value such as patents or trademarks.

Step-by-step explanation:

The statement that does not describe intangible assets is B) They are financial instruments. Intangible assets, such as patents, trademarks, and goodwill, do lack physical existence (A) and provide long-term benefits (C). They are indeed classified as long-term assets (D). However, intangible assets are not financial instruments. Financial instruments consist of monetary contracts between parties such as stocks, bonds, and bank deposits, and they are a separate category on a balance sheet. In contrast, intangible assets represent value derived from legal rights and intellectual property.