(Complete) Ch. 07: long-term assets

True or false: The initial cost of property, plant, and equipment includes the purchase price and all expenditures necessary to bring the asset to its desired condition and location for use.

True

Costs that produce future benefits are ______, but costs that produce benefits only in the current period are ______.

capitalized; expensed

Land used in a company's _____ is classified as property, plant and equipment, while land held solely for the expected increase in value is classified as an _____.

operations; investment

The purchase price and all costs to bring an asset to its desired condition and location for use should be ______.

capitalize

The term _____ means to record an expenditure as an asset.

capitalize

What is the first issue that needs to be addressed in order to properly report tangible and intangible assets?

Determining the amounts to be included in the assets' initial cost

In accounting, expenditures recorded as assets are said to be _____.

capitalized

Larry purchases land to be used for a new corporate headquarters. Which of the following items are capitalized in the cost of land?

-Costs to remove an old building -Legal fees to secure title -Grading the land -Title insurance

The issues that are important for tangible and intangible assets, include determining:

-how to expense the cost of the asset over its life -how to record the disposal of the asset -what amounts to include in the cost

Which of the following are long-term tangible assets?

Property Equipment

Which of the following is an intangible asset?

Trademark Patent Copyright

Land, land improvements, buildings, equipment, and natural resources are examples of _____ assets.

tangible

Which of the following are tangible assets?

Land improvements Building