ACC 304 help A Guide to career/Snaptutorial ACC 304 help A Guide to career/Snaptutorial | Page 69

27. If a corporation purchases a lot and building and
subsequently tears down the building and uses the property as a
parking lot, the proper accounting treatment of the cost of the
building would depend on
a. the significance of the cost allocated to the building in relation to
the combined cost of the lot and building.
b. the length of time for which the building was held prior to its
demolition.
c. the contemplated future use of the parking lot.
d. the intention of management for the property when the building
was acquired.
28. The debit for a sales tax properly levied and paid on the
purchase of machinery preferably would be a charge to
a. the machinery account.
b. a separate deferred charge account.
c. miscellaneous tax expense (which includes all taxes other than
those on income).
d. accumulated depreciation--machinery.
29.
Fences and parking lots are reported on the balance sheet as
a. current assets.
b. land improvements.
c. land.