Which of the following is an example of an intangible asset?

Intangible assets are non-physical assets that provide value to a business but do not have a physical presence. Goodwill and patents are prime examples of intangible assets. Goodwill represents the value of a company's brand, customer relationships, employee relations, and other factors that contribute to future earnings potential beyond what can be accounted for by physical assets. Patents provide exclusive rights to produce or sell an invention, which can be a significant competitive advantage for a business.

In contrast, inventory consists of physical goods that a company sells, making it a tangible asset. Physical property, such as buildings and land, is also classified as a tangible asset because it has a physical form. Cash reserves represent liquid financial resources and are categorized as current assets, rather than intangible assets. Understanding these classifications is essential for recognizing how different types of assets contribute to a company’s overall value and operations.