Which of the Following Journal Entries Most Accurately Records an Owner

question 73

Multiple Choice

Which of the following journal entries most accurately records an owner investing building and land into a business valued at $250,000 and $400,000 respectively?

• A) \(\begin{array} { | c | r | r | }
• \hline \text { Building and land } & 650,000 & \\
• \hline \text { Capital } & & 650,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | c | r | r | }
• \hline \text { Building and land } & 650,000 & \\
• \hline \text { Cash } & & 650,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Building } & 250,000 & \\
• \hline \text { Land } & 400,000 & \\
• \hline \text { Cash } & & 650,000\\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Building } & 250,000 & \\
• \hline \text { Land } & 400,000 & \\
• \hline \text { Capital } & & 650,000\\
• \hline
• \end{array}\)

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Definitions:

Financing Policies

Guidelines a company follows to manage its financing decisions, including how it chooses between debt and equity financing.

FVTPL

Fair Value Through Profit or Loss, a financial reporting method where assets and liabilities are periodically revalued, with the changes affecting the income statement directly.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of a business.

Significant Influence

The ability to engage in the financial and operational policy choices of an invested entity without having control over them.