DECA Retail Merchandising Practice Exam

Which of the following is an example of intangible assets?

1. Buildings

2. Cash

3. Brand image

4. Accounts receivable

The correct answer is: Brand image

Intangible assets are non-physical entities that provide value to a business, primarily through their potential to generate future profits. A brand image is a prime example of an intangible asset, as it represents the perception and reputation a company holds in the market, which can significantly influence customer choices and their willingness to pay a premium for products or services. Brand image encompasses factors such as customer loyalty, awareness, and emotional connections to the brand, all of which can have a profound financial impact, despite lacking a physical presence. Businesses invest heavily in building and maintaining a strong brand image, recognizing that it can lead to sustained competitive advantages. In contrast, the other options listed are tangible assets or items that can be quantified more easily in financial terms. Buildings are physical assets with a definitive lifespan and value; cash is a liquid asset readily usable for transactions; and accounts receivable represent amounts owed to the business, which also have a clear financial value associated with them. Thus, these options cannot be classified as intangible assets, making brand image the correct choice in this context.