What is typically associated with fixed assets?

Fixed assets are long-term tangible assets that a company uses in the production process to generate revenue. These assets typically include property, plant, and equipment, which are crucial for a business's operations. One primary characteristic of fixed assets is that they are subject to depreciation.

Depreciation is the accounting method used to allocate the cost of a tangible asset over its useful life. This process reflects the reduction in value of the asset as it is used over time due to wear and tear, obsolescence, or other factors. Understanding depreciation is essential because it impacts a company’s financial statements and tax obligations.

In contrast, the other options relate to different aspects of finance and assets that do not apply to fixed assets. Short-term investments are more fluid and generally involve assets that can be quickly converted to cash, which is not the case with fixed assets. Quick liquidity refers to the ability to convert assets into cash quickly, again not characteristic of fixed assets, as they are not intended for immediate cash flow. Immediate cash flow pertains to cash management, focusing on funds available for immediate use, and does not connect directly to the nature or treatment of fixed assets. Thus, the association of fixed assets with depreciation highlights an essential facet of their accounting and financial management.