Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following expenditures related to land should be capitalized as part of the land's cost on the balance sheet?

Cost of landscaping after the building is in use

Interest paid on a loan after construction is complete

Cost of clearing and grading the land

Annual property taxes on the land

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Verified step by step guidance

Understand the concept of capitalization: Capitalization involves recording an expenditure as an asset on the balance sheet rather than as an expense on the income statement. For land, only costs that prepare the land for its intended use are capitalized.

Review the expenditures listed in the problem: Analyze each item to determine whether it contributes to preparing the land for its intended use or is an ongoing expense.

Evaluate 'Cost of landscaping after the building is in use': Landscaping after the building is in use is considered an improvement or maintenance expense and is not capitalized as part of the land's cost.

Evaluate 'Interest paid on a loan after construction is complete': Interest paid after construction is complete is considered a financing cost and is expensed, not capitalized as part of the land's cost.

Evaluate 'Cost of clearing and grading the land': Clearing and grading the land are necessary to prepare the land for its intended use, so these costs are capitalized as part of the land's cost on the balance sheet.