Asked by Ntswaki Mereki on May 09, 2024
Verified
When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.
Land Improvements
Enhancements made to a parcel of land to increase its value, such as landscaping, drainage systems, and sidewalks, which are typically depreciatable over their useful life.
- Familiarize oneself with the financial handling of expenditures linked to the acquisition and betterment of property, plant, and equipment.
Verified Answer
MG
Marko GrgicMay 11, 2024
Final Answer :
False
Explanation :
These costs are directly associated with preparing the land for its intended use, so they should be capitalized to the Land account, not to a separate Land Improvements account. Land Improvements typically refer to depreciable assets placed on the land.
Learning Objectives
- Familiarize oneself with the financial handling of expenditures linked to the acquisition and betterment of property, plant, and equipment.