If a Corporation Purchases a Lot and Building and Subsequently

question 67

Multiple Choice

If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on

• A) the significance of the cost allocated to the building in relation to the combined cost of the lot and building.
• B) the length of time for which the building was held prior to its demolition.
• C) management's plans for the property when the building was acquired.
• D) the planned future use of the parking lot.

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Definitions:

Breadwinners

Persons who earn the primary source of income for a household, supporting the family's financial needs.

Family

An intimate group of two or more people who (1) live together in a committed relationship, (2) care for one another and any children, and (3) share activities and close emotional ties.

Deteriorating

Experiencing a decline in quality, condition, or vitality over time.

Schools Of Thought

Various philosophies or methods of thinking within a particular field or issue.