1 Burr Publishers purchased a building on March 20 20X1 for

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