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:

Average Number

A value found by adding all numbers in a set together and then dividing by the quantity of numbers in that set.

Inventory

The unfinished materials, items in production, and completed products that form part of a company's assets, which are available for sale or will soon be.

LIFO Reserve

The difference between the cost of inventory calculated under the Last-In, First-Out method and its cost under the First-In, First-Out method.

FIFO Costing

An inventory valuation method that assumes the first units produced or acquired are the first ones to be expensed or sold (First In, First Out).