Classify Each of the Following Costs Associated with Long-Lived Assets

question 219

Multiple Choice

Classify each of the following costs associated with long-lived assets as one of the following:
-Purchase price of land purchased for new business site

• A)Buildings
• B)Machinery and equipment
• C)Land
• D)Land improvements

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the cost of their sale or disposal, used in inventory valuation and accounts receivable.

FIFO

An inventory valuation method known as "First-In, First-Out," where goods purchased or produced first are sold or used first.

Perpetual Inventory System

An inventory management method where inventory levels are updated in real-time following each sale or purchase transaction.

Net Income Manipulation

The practice of using accounting tricks to make a company's financial performance appear better than it actually is.