Chapter 10 ACCT 3113

Accounting for land improvements requires that the land improvements are capitalized and then ____________ over periods benefited by their use

expensed

When assets are acquired in a noncash transaction, if the fair value of the noncash items given is not clearly evident, then the ______ value of the assets received is used to record the assets.

fair

The basic principle for valuing assets in a nonmonetary exchange is to value the asset received at

fair value

A nonmonetary exchange has commercial substance if the ______ will change as a result of the exchange.

future cash flows

The distinction between land and land improvements is that:

land has an indefinite life

Which of the following costs should be capitalized in the costs of acquiring a building?

realtor commissions legal fees to obtain title remodeling building

Which of the following is true regarding a nonmonetary exchange of assets?

A gain or loss is recognized for the difference between the fair value and the book value of the asset given up.

A non-monetary exchange is considered to have _______________ substance if the future cash flows will change as a result of the exchange.

Commercial

The two important accounting issues related to self-constructed assets are

treatment of interest charges. allocation of overhead.

Which of the following should be included in the cost of buildings?

Real estate commissions relating to purchase of building