If land is purchased as a building site, the cost of removing existing structures is not charged to the Land accountGroup of answer choicesTrueFalse

Breakdown of the Problem

1. Question Context: The question is about accounting treatment related to land acquisition.
2. Key Terms: "Land account" and "removing existing structures".

Relevant Concepts

1. Accounting Principles: According to the Generally Accepted Accounting Principles (GAAP), costs that are necessary to prepare land for its intended use should be included in the land account.
2. Capitalized Costs: The cost of removing existing structures on the land is generally considered a capitalized cost associated with preparing the land.

Analysis and Detail

1. Land Acquisition Costs: When a building site is acquired, all costs incurred to make the land ready for use (including removing structures) are typically capitalized.
2. Implication for Land Account: This means that the expense for removing existing structures would be included in the Land account and not charged separately.

Verify and Summarize

1. Accounting Treatment: In summary, the cost of removing existing structures is indeed charged to the Land account as part of the preparation costs.
2. Final Conclusion: Thus, the statement in the question is False.

Final Answer

False: The cost of removing existing structures is charged to the Land account.