A company paid $20,000,000 for land and building in a single purchase transaction. The land had been appraised for $18,000,000 and the building for $6,000,000. If the accountant were to record the acquisition with a credit to cash as $20,000,000 and a debit to land of $18,000,000 Multiple Choice net income in previous years would be understated net income in future years would be correctly stated None of the other alternatives are correct net income in future years would be overstated net income in future years would be understated
A company paid $20,000,000 for land and building in a single purchase transaction. The land had been appraised for $18,000,000 and the building for $6,000,000. If the accountant were to record the acquisition with a credit to cash as $20,000,000 and a debit to land of $18,000,000 Multiple Choice net income in previous years would be understated net income in future years would be correctly stated None of the other alternatives are correct net income in future years would be overstated net income in future years would be understated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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