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:

Estimated Cost

An approximation of the cost to produce goods or services, used for budgeting and planning.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their usage of the resources.

Materials Handling

The movement, protection, storage, and control of materials and products throughout manufacturing, warehousing, distribution, and disposal processes.

Estimated Manufacturing Overhead

The forecasted indirect costs associated with the production process, not directly tied to specific units.