Chapter 8, Problem 3DQ

To determine

Land:

Land is a piece of earth that has a useful life of unlimited years, when a land is purchased for building purposes then the actual cost of building will also include commission paid on purchase, legal fees and insurance fees.

Land improvement: Land improvements are additions to the land which has a limited useful life. They are not added to the cost of land as the amount spent on the improvement of the land increases usefulness of the land.

To identify: The difference between land and land improvements.