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

question 138

Multiple Choice

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost assessed by city for paving a public street that borders land on which a new business location will be constructed

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

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Definitions:

EOQ

Economic Order Quantity is the ideal quantity of inventory a company should purchase to minimize the total costs of ordering and holding.

Quantity Discount

A pricing strategy where the price per unit of an item is reduced based on the quantity purchased, incentivizing larger orders.

Carrying Costs

The expenses incurred by holding inventory or assets over a period of time.

Carrying Receivables

The process of maintaining accounts receivable on the balance sheet, which represents money owed to a company by its customers for goods or services delivered.