Accord Corporation Purchased Land for $100,000 by Making a Cash

question 180

Multiple Choice

Accord Corporation purchased land for $100,000 by making a cash payment of $30,000 and promising to pay the remaining amount in a later accounting period.What is the net effect of this transaction on Accord's accounting equation?

• A)assets increase by $100,000 and liabilities decrease by $30,000
• B)assets increase by $100,000 and liabilities decrease by $70,000
• C)assets and equity increase by $70,000
• D)assets and liabilities increase by $70,000

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Definitions:

Production

The method of producing goods or services through the integration of different inputs such as work, materials, and technology.

Two Goods

A reference to two distinct products or commodities in economic analysis, often used in discussions of consumer choice and preference.

World Price

The price at which goods are traded internationally, determined by supply and demand in the global market.

Domestic Price

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