Land was offered for sale at $282,000. If the land appraised for $270,000 and Sa

Question

Land was offered for sale at $282,000. If the land appraised for $270,000 and Salem Company paid $269,000 the land, the amount Salem would record for the purchase of the land in the accounting record is: a. $282,000 b. $269,000 c. $270,000 d. $539,000 11. Which of the following is an appropriate explanation for this journal entry: Cash 400 Fees earned 400 a. Sold capital stock. b. Paid creditors on account. c. Received cash on account. d. Received payment for services. 12. Which of the following is the chronological listing of an transactions in the business? a. ledger b. trial balance c. chart of accounts d. journal Question 13-18 Indicate the effect of each transaction on the accounting equation by selecting the appropriate letter from the following list: a. increase in an asset, decrease in another asset b. increase in an asset, increase in a liability c. increase in an asset, increase in owner's equity d. decrease in an asset, decrease in a liability e. decrease in an asset, decrease in owner's equity 13. Paid $900 for rent. 14. Purchased $350 of supplies on account. 15. Collected $4,000 of accounts receivable. 16. Paid $300 cash to creditors on account. 17. Paid $100 dividends. 18. Sold land for $190,000.

Explanation / Answer

10. The amount which Salem would record for the purchase of land in the accounting records will be the appraised value thereof viz. $ 270,000. 11. Received Payment for Services is an appropriate explanation for the journal entry given. 12. The chronological listing of all transactions in the business is the chart of accounts. 13. Paid $ 900 for rent - e 14. Purchased $ 350 of supplies on account - b 15. Collected $ 4,000 of accounts receivable - a 16. Paid $ 300 cash to creditors on account - d 17. Paid $ 100 dividends - e 18. Sold land for $ 190,000 - a

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