81.Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the marketvalue of the land to be $220,000. The Focus Company initially offered to buy the land for $177,000. Thecompanies settled on a purchase price of $212,000. On the same day, another piece of land on the same block soldfor $232,000. Under the cost concept, at what amount should the land be recorded in the accounting records ofFocus Company?
a. $177,000
b. $212,000
c. $220,000
d. $232,000
82.Many countries outside the United States use financial accounting standards issued by the
a.AICPA
b.SEC
c.IASB
d.FASB
83.The unit of measure concept
a.is only used in the financial statements of manufacturing companies
b.is not important when applying the cost concept
c.requires that different units be used for assets and liabilities
d.requires that economic data be reported in yen in Japan or dollars in the United States
84.Which of the following is
nottrue of accounting principles?
a.Financial accountants follow generally accepted accounting principles (GAAP).
b.Following GAAP allows accounting information users to compare one company to another.
c.A new accounting principle can be adopted with stockholders' approval.
d.The Financial Accounting Standards Board (FASB) has primary responsibility for developing accountingprinciples.
85.The initials GAAP stand for
a.General Accounting Procedures
b.Generally Accepted Plans
c.Generally Accepted Accounting Principles
d.Generally Accepted Accounting Practices
86.Assets are
a.always lower than liabilities
b.equal to liabilities less stockholders' equity
c.the same as expenses because they are acquired with cash
d.financed by the stockholders and/or creditors
87.Debts owed by a business are referred to as
a.accounts receivables
b.expenses
c.stockholders' equity
d.liabilities
88.The accounting equation may be expressed as
a.Assets = Equities − Liabilities
b.Assets + Liabilities = Stockholders' Equity
c.Assets = Revenues − Liabilities
d.Assets − Liabilities = Stockholders' Equity
89.Which of the following is
notan asset?
a.investments
b.cash
c.inventory
d.stockholders' equity
90.The assets and liabilities of the company are $128,000 and $84,000, respectively. Stockholders' equity should equal
a. $212,000
b. $44,000
c. $128,000
d. $84,000