Accounting for Property, Plant, and Equipment

Front

Which of the following is always included in the cost of land acquisition? Property taxes, Survey costs, Purchase price of the land, Legal fees for zoning

Back

Purchase price of the land

Front

If land is held for a currently undetermined use, how is it classified?

Back

Investment property

Front

Which of the following land-related improvements should be charged to the “land improvements” account when depreciated?

1. Landfill

,

1. Clearing and leveling

,

1. Surveying fees

,

1. Fences and drainage systems

Back

Fences and drainage systems

Front

If no insurance is taken during construction and the company pays for building damages due to an accident, how should the cost be treated?

Back

Expensed outright

Front

When acquiring a building, which of the following legal expenses should be capitalized? Legal fees for resolving tenant disputes, Legal fees directly connected with the purchase of the building, Legal fees for future tax planning, Legal fees related to zoning changes made after purchase

Back

Legal fees directly connected with the purchase of the building

Front

How are real property taxes generally treated in accounting?

Back

They are treated as outright expenses unless they are unpaid taxes assumed by the buyer.

Front

What types of costs are included when a building is constructed?

Back

Architect fees and cost of temporary safety measures

Front

Which of the following is NOT considered a capitalized cost when constructing a building?
Superintendent fees, Cost of excavation, Interest on construction loans during the building period, Routine maintenance after construction is complete

Back

Routine maintenance after construction is complete

Front

Which of the following best describes what Property, Plant, and Equipment (PPE) is? Options: Assets that a company owns and uses over a long period of time to generate income, Tangible assets that have a short useful life and are below a certain cost threshold, Tangible assets used in production, supply of goods or services, rental, or administrative purposes, Assets used to ensure the safety of employees in the workplace

Back

Tangible assets used in production, supply of goods or services, rental, or administrative purposes

Front

How long are PPE usually expected to be used?

Back

For more than a year