The purchase of a property that included land, building, and related improvements is called a lump-sum or basket purchase.Group of answer choicesTrueFalse

Answer and Explanation

The statement is True.

A lump-sum or basket purchase refers to a situation where a buyer acquires multiple assets (such as land, buildings, and improvements) in a single transaction for a total price rather than specifying the individual costs for each asset. This type of purchase simplifies the transaction and accounting processes, but it often requires allocation of the total cost to the individual assets for financial reporting purposes.

In this scenario, the property is viewed as a whole, which may include various components like the land itself, the structure built on it, and any upgrades or improvements made. This means that rather than treating each asset as a separate purchase, everything is grouped together under one negotiated price. Thus, the statement given in the question accurately describes the nature of a lump-sum or basket purchase.