1. Burr Publishers purchased a building on March 20, 20X1, for $160,000. Other amounts related
to this purchase are as follows:
Price listed by seller on Jan. 1, 20X1, $180,000
Burr Publishers’ initial offer to buy on Jan. 31, 20X1, $140,000
Purchase price on Mar. 20, 20X1, $160,000
Estimated selling price on Dec. 31, 20X3, $220,000
Assessed value for property taxes, Dec. 31, 20X3, $190,000
Which amount related to this purchase should be recorded in the accounting records?
a. 220,000
b. 180,000
c. 140,000
d. 160,000
2. The resources owned by a business are its _____.
a. liabilities
b. owner\'s equity
c. assets
d. None of these choices are correct.
3. The rights and claims of creditors on a company\'s assets are represented by _____.
a. liabilities
b. owner\'s equity
c. assets
d. None of these choices are correct.
4. Which element of the accounting equation represents the rights of owners?
a. Liabilities
b. Owner\'s equity
c. Assets
d. None of these choices are correct.
Solution
1
160000 should be recorded in the accounting records according to Cost Principle
2
The resources owned by a business are its assets
3
The rights and
claims of creditors on a company\'s assets are represented by liabilities
4
Owner\'s
equity represents the rights of owners