Land Is Purchased by the Business for $100,000

question 149

Multiple Choice

Land is purchased by the business for $100,000.The company pays for land with a $20,000 cash payment and the execution of an $80,000 promissory note payable to the seller.How does this purchase affect the business's accounting equation?

• A) Assets increase $80,000; liabilities decrease $20,000.
• B) Assets increase $20,000; liabilities decrease $80,000.
• C) Assets increase $80,000; owner's equity increases $80,000.
• D) Assets increase $80,000; liabilities increase $80,000.

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Definitions:

Second Stage

The second stage usually refers to an intermediate or development phase in a process, project, or lifecycle, where initial foundations have been built upon but final objectives are not yet reached.

Management

The process of dealing with or controlling things or people, including planning, organizing, leading, and controlling resources to achieve organizational goals.

Buyer

An individual or entity that acquires goods or services in exchange for payment.

Public

Relating to or involving people in general, rather than being limited to a private group or individuals.