What account is land?

The land is a fixed asset and is treated as a long-term asset account. 

Explanation

The land is a fixed asset which is also referred to as a long-term asset.

The fixed assets are those assets that are not expected to be cashed, consumed, last, sold, or written off within one accounting year and are purchased for long-term use. The fixed assets are also called non-current assets and the reason behind it is that current assets are easily converted into cash within one year and they are not.

Fixed assets are planned by the company to be used for the long term in order to generate income.

Example- Land, building, furniture, plants & equipment, etc.

Why is land an asset?

Although the land is not depreciated, it is still considered to be an asset because just like other assets the business spends its own money to acquire it.

It can also be used by the business for different operations and it doesn’t create any liability for the business. Instead, reselling the land after a few years can help the company earn a huge margin of profit.

Land in the balance sheet

On the asset side of the balance sheet, the land is stated under the heading long-term assets.

Balance Sheet (for the year…)

Therefore, the land is a fixed asset and is treated as a long-term asset account.