- CFA Exams
- CFA Exam: Level I 2021
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 22. Understanding Balance Sheets
- Subject 1. Components and Format of the Balance Sheet
CFA Practice Question
Each of the following should be classified as plant and equipment on the balance sheet of Chin's Nursery except ______.
B. land on which the nursery is located
C. plants held for resale to customers
A. the office building or a new machine
B. land on which the nursery is located
C. plants held for resale to customers
Correct Answer: C
User Contributed Comments 10
| User | Comment |
|---|---|
| danlan | That is inventory. |
| CoffeeGirl | anything that is intended to sell to customers is classified as inventory, even it is a plant, equipment, machine, or a building. |
| MFTIOA | Assets-Held-for-Sale don't know if it's considered inventory, a candle company can't consider its for-sale wax factory as inventory can it? |
| yesandy11 | But it's a plant... |
| SKIA | It is not considered inventory. It is considered an investment. A plant held for re-sale seems as though it is a short term item, i.e. held for resale. If the plant was being held for speculative purposes it would be a long term investment. |
| Inaganti6 | Do not classify the plants under the plant category....how contrarian |
| davidkhang | LOL |
| Miqizjg | Anything that is not intended to be used for operation of business is not considered as plant and equipment |
| manstee | I got confused with plant vs plants. |
| Freddie33 | Anyone else thinking of plants as in like trees? |