Classify each of the following costs associated with long-lived assets as one of the following:
-Costs of government permits required to develop land for a new business location
A)Buildings
B)Machinery and equipment
C)Land
D)Land improvements

Question

Quizplus · Accepted Answer

Costs of government permits required to develop land for a new business location are directly associated with the preparation or development of the land itself, thus classified under Land costs. These costs are necessary to prepare the land for its intended use and are capitalized as part of the land's cost.

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