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.
Date: September 2nd, 2020
The ultimate control of the corporation rests with the ________. A) board of directors B) stockholders C) chairperson D) chief operating officer ANSWER B
Date: September 2nd, 2020
Since cost is a reliable measure, the cost principle holds that the accounting records should continue reporting an asset at its historical cost over its useful life. Indicate whether the statement is true or false ANSWER TRUE
Date: September 2nd, 2020
According to the ________, acquired assets should be recorded at the amount actually paid rather than at the estimated market value. A) going concern assumption B) economic entity concept C) cost principle D) monetary unit assumption ANSWER C
Date: September 2nd, 2020
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 […]
Date: September 2nd, 2020
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
Date: September 2nd, 2020
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 […]
Date: September 2nd, 2020
Which of the following organizations is responsible for the creation and governance of accounting standards in the United States? A) Financial Accounting Standards Board B) Institute of Management Accountants C) American Institute of Certified Public Accountants D) Securities and Exchange Commission ANSWER A
Date: September 2nd, 2020
The guidelines for accounting information are called Generally Accepted Accounting Principles (GAAP). Indicate whether the statement is true or false ANSWER TRUE
Date: September 2nd, 2020
What are Generally Accepted Accounting Principles (GAAP)? Which entity is currently responsible for determining GAAP? What will be an ideal response ANSWER Generally Accepted Accounting Principles are the guidelines for accounting information, currently formulated by the Financial Accounting Standards Board (FASB). GAAP is the main U.S. accounting rule book.
Date: September 2nd, 2020
