Quiz Solutions

Joshua Thomas Corporation manufactures and retails computer

Joshua Thomas Corporation manufactures and retails computer hardware. The president of the corporation bought a new car as a gift for his daughter and paid for it using cash from the business Since the corporation paid for the car, it was recorded in its books as an asset. Which of the following concepts or principles […]

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Date: September 2nd, 2020

Johnson Company purchased land for $30,000. The president of

Johnson Company purchased land for $30,000. The president of Johnson Company believes that the land is actually worth $35,000. The land can be recorded at $35,000. Indicate whether the statement is true or false ANSWER FALSE .The cost principle states that acquired assets are recorded at their actual cost.

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Date: September 2nd, 2020

Lorna Smith decided to start her own CPA practice as a profe

Lorna Smith decided to start her own CPA practice as a professional corporation, Smith CPA PC. Her corporation purchased an office building for $35,000 that her real estate agent said was worth $50,000 in the current market The corporation recorded the building as a $50,000 asset because Lorna believes that is the real value of […]

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Date: September 2nd, 2020

Which of the following actions determines when a corporation

Which of the following actions determines when a corporation comes into existence? A) The charter is obtained from the state. B) The incorporators pay fees, sign the charter, and file required documents with the state. C) The first share of stock is issued. D) The corporate bylaws are written. ANSWER C

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Date: September 2nd, 2020

A business purchases a building for $250,000. The current ma

A business purchases a building for $250,000. The current market value is $375,000. The assessment value is $325,000. What value should the building be recorded at, and which accounting principle supports your answer? What will be an ideal response ANSWER The building should be recorded at the actual cost of $250,000. This is supported by […]

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Date: September 2nd, 2020

Regarding the separation of corporate ownership and manageme

Regarding the separation of corporate ownership and management, which of the following is a true statement? A) The corporate officers elect the board of directors. B) The corporation runs better with day-to-day input from stockholders. C) None of the stockholders have the ability to manage the business of the corporation. D) Stockholders own the business, […]

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Date: September 2nd, 2020