Any Excess of Fair Value Over Book Value Attributable to Land

question 23

Multiple Choice

Any excess of fair value over book value attributable to land on the date of acquisition is to be:

• A) allocated to other identifiable assets.
• B) capitalized and amortized.
• C) charged to Retained Earnings on the date of acquisition.
• D) taken into income when the Land is sold.

---

Definitions:

Average Cost Method

An inventory valuation method that assigns the average cost of all similar items in the inventory until they are sold.

LIFO

LIFO, or Last In, First Out, is an inventory valuation method where the last items to be added to inventory are assumed to be the first ones sold.

Ending Inventory

The total value of a company's merchandise, goods, and products held at the end of an accounting period.

Sales Revenue

The income received by a company from its sales of goods or the provision of services.