Property, Plant, and Equipment (PP&E) are also known as fixed assets or plant assets.

Question

BlackTom AI · Accepted Answer

The question asserts a statement about PP&E and asks us to evaluate the truth of that statement.
Option 1: 'True' — This aligns with standard accounting terminology, as Property, Plant, and Equipment are indeed commonly referred to as fixed assets or plant assets. These assets are long-term tangible assets used in operations and not intended for sale in the ordinary course of business, which is consistent with the definition of PP&E.
Option 2: 'False' — This would be incorrect because the commonly accepted labels for PP&E include fixed assets and plant assets; saying they are not known by these terms would contradict standard accounting usage and textbooks.
In evaluating the terminology, it’s important to recall that PP&E encompasses long-lived tangible assets such as land, buildings, machinery, and equipment. These items are capitalized and depreciated (except for land) over their useful lives, distinguishing them from current assets and intangible assets. Therefore, the assertion in the question accurately reflects how PP&E is commonly described in financial reporting.

Property, Plant, and Equipment (PP&E) are also known as fixed assets or plant assets.

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