Costa Company Purchased a Large Area of Land with the Intention

question 14

Multiple Choice

Costa Company purchased a large area of land with the intention to transform it into a banana plantation.Before the new seedlings can be planted, the site, which is prone to flooding, must be drained.The cost of the draining should be

• A)Capitalized as part of the cost of the land.
• B)Expensed only after the first crop of bananas has been harvested.
• C)Expensed immediately
• D)Reported as loss from discontinued operations

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Definitions:

Independent Variable

A variable that is manipulated or controlled in an experiment to test its effect on a dependent variable.

Dependent Variable

In an experiment or study, the variable that is being tested and measured, which changes in response to the independent variable.

Upsloping Line

A line on a graph that shows an increase in the value of a variable on the vertical axis as the value of a variable on the horizontal axis increases, typically seen in supply curves.

Independent Variable

A variable in an experiment or model that is manipulated or changed to observe its effect on a dependent variable.