Which of the Following Is Correct When Land Costing $20,000

question 35

Multiple Choice

Which of the following is correct when land costing $20,000 is sold for $29,000? The land was a component of plant and equipment on the balance sheet.

• A)Revenues are debited for $29,000.
• B)Cost of goods sold is credited for $20,000.
• C)Gain on sale of land is credited for $9,000.
• D)Operating income increases $29,000.

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Definitions:

Abstraction

The process of reducing complexity by focusing on the main elements and ignoring specific details, often used in problem-solving and art.

Programmed Decisions

Decisions made in routine, repetitive, predictable situations that have occurred often enough to enable decision rules to be developed.

Structured Problems

Problems that are straightforward and clear with respect to information needs.

Environment of Uncertainty

Circumstances or situations where the outcomes, risks, or effects are unpredictable and lack clarity.