A building that was recently appraised at a value of $200,000 was purchased by Properties Corporation. In the journal entry, the building was debited for $183,572. This was most likely a result of: 1. The building's value having an impairment loss 2. The market value of the building increasing and the net book value of the building decreasing 3. The building amortizing in value 4. The building having been part of a basket purchase

A building that was recently appraised at a value of $200,000 was purchased by Properties Corporation. In the journal entry, the building was debited for $183,572. This was most likely a result of: 1. The building's value having an impairment loss 2. The market value of the building increasing and the net book value of the building decreasing 3. The building amortizing in value 4. The building having been part of a basket purchase

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Description: (Multiple Choice Question)A building that was recently appraised at a value of $200,000 was purchased by Properties Corporation. In the journal entry, the building was debited for $183,572. This was most likely a result of: 1. The building's value ha

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

Section: Chapter Questions

Problem 7Q

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

(Multiple Choice Question)

A building that was recently appraised at a value of $200,000 was purchased by Properties Corporation. In the journal entry, the building was debited for $183,572. This was most likely a result of:

1. The building's value having an impairment loss

2. The market value of the building increasing and the net book value of the building decreasing

3. The building amortizing in value

4. The building having been part of a basket purchase

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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