Classify Each of the Following Costs Associated with Long-Lived Assets

question 86

Multiple Choice

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of grading and leveling land to be used for a new business site

• A)Land improvements
• B)Buildings
• C)Land
• D)Machinery and equipment

---

Definitions:

Financial Affairs

The management and oversight of a person's or organization's money matters, including investments, budgets, and transactions.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or completion, used primarily in inventory valuation and accounts receivable.

Historical Cost

Historical cost is the original monetary value of an economic item purchased or incurred, used as a basis for accounting and financial reporting.

Replacement Cost

The current cost of replacing an asset with a similar one at its current market price.