The Costs of Land Improvements with Limited Lives, Such as a Parking

question 31

Multiple Choice

The costs of land improvements with limited lives, such as a parking lot, are

• A) added to the land account.
• B) recorded in a separate account.
• C) depreciated over their useful lives.
• D) recorded in a separate account and depreciated over their useful lives.

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Definitions:

Debt Ratio

A financial ratio that compares the amount of a company’s total debt to its total assets, indicating the leverage level.

Assets

Resources owned by a company or individual considered valuable and can be used to produce positive economic value.

Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership interest of shareholders.

Note Payable

An obligation in the form of a promissory note, which requires the borrower to pay back the loan or debt to the lender at a future date.