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

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Which one of the following fixed assets is not depreciated?

Buildings

Vehicles

Equipment

Land

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Verified step by step guidance

Understand the concept of depreciation: Depreciation is the allocation of the cost of a tangible fixed asset over its useful life. It reflects the wear and tear, obsolescence, or usage of the asset over time.

Identify the characteristics of land: Land is considered a fixed asset, but it is not subject to depreciation because it does not have a finite useful life. Unlike other assets, land does not wear out, become obsolete, or get consumed through usage.

Compare land to other fixed assets: Buildings, vehicles, and equipment are depreciated because they have a limited useful life and their value diminishes over time due to usage or obsolescence.

Recognize the accounting treatment for land: In financial accounting, land is recorded as a fixed asset on the balance sheet but remains at its original cost unless impaired or revalued. It is not depreciated.

Conclude why land is not depreciated: Land is unique among fixed assets because it retains its value indefinitely, making it exempt from depreciation calculations.