What is commonly considered a component of fixed assets?

Fixed assets, also known as non-current assets or long-term assets, are resources that a business owns and uses in its operations to generate revenue, and typically they have a useful life extending beyond one year. The correct answer indicates that land and buildings owned by a company are indeed common components of fixed assets.

Land is considered a fixed asset because it is not subject to depreciation and usually appreciates in value over time. Buildings, on the other hand, can be depreciated over their useful lives, which is an essential aspect of accounting for fixed assets, as it reflects the consumption of their economic benefits over time. These properties are fundamental to a company’s operations, as they provide space for business activities, construction of facilities, and various other operational needs.

In contrast, the other options refer to different types of assets that do not qualify as fixed assets. Inventory held for sale is classified as a current asset because it is intended to be sold within the company's operating cycle. Corporate bonds are financial instruments and are classified as investments, rather than physical assets like land and buildings. Lastly, cash reserves are also current assets, representing liquidity that a company can access immediately for operational needs or expenses, rather than fixed, long-term assets.