Indicate Whether Each of the Following Expenditures Should Be Classified

question 41

Essay

Indicate whether each of the following expenditures should be classified as land (L), land improvements (LI), buildings (B), equipment (E), or none of these (X). ___1. Parking lots
___2. Electricity used by a machine
___3. Excavation costs
___4. Interest on building construction loan
___5. Cost of trial runs for machinery
___6. Drainage costs
___7. Cost to install a machine
___8. Fences
___9. Unpaid (past) property taxes assumed
___10. Cost of tearing down a building when land and a building on it are purchased

Explain the GAAP requirements for accounting for compensated absences.

Discuss the accounting treatment for product warranties, litigation claims, and premium offers.

Apply the criteria for accrual and disclosure requirements for contingencies in financial statements.

Understand the differences between IFRS and U.S. GAAP in accounting for contingencies.

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Definitions:

Comparison Universe

A benchmark or pool of investments used to evaluate the performance of a specific investment or portfolio.

Mutual Funds

Professionally managed investment initiatives that are bankrolled by stockholders and trade across assorted holdings.

Astronomy

The scientific study of celestial objects, space, and the physical universe as a whole, beyond Earth's atmosphere.

Treynor Measure

A performance metric that evaluates the returns of an investment portfolio or fund relative to its market risk.