The Cost of Tearing Down a Building on Land Just

question 200

Multiple Choice

The cost of tearing down a building on land just purchased should be

• A)debited to the Land account.
• B)debited to the Land Improvements account.
• C)debited to the Buildings account.
• D)expensed immediately.

---

Definitions:

Accounts Receivable

sums of money owed to a company by customers for goods or services delivered or used but not yet paid for.

Inventory

The total amount of goods and materials held by a business for the purpose of resale, production, or repair.

Total Equity Value

The total value of all shareholder equity in a company, calculated as the market value of total assets minus total liabilities.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholder equity, indicating how efficiently a company uses investments to generate earnings.