If a Company Purchases Land, Paying Part with Cash and Issuing

question 124

True/False

If a company purchases land, paying part with cash and issuing a note payable for the balance, the journal entry to record this transaction will include a debit to Cash.

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Definitions:

IFRS

International Financial Reporting Standards; a set of accounting standards developed by the International Accounting Standards Board that is becoming the global standard for the preparation of public company financial statements.

Cost Recovery Method

An accounting technique where revenue is recognized only after the costs of the sold goods or services are recovered, deferring profit recognition.

IFRS

A collection of accounting guidelines formulated by the International Accounting Standards Board (IASB) to assist in the creation of financial statements for public companies worldwide, known as International Financial Reporting Standards.

Installment Sales

A sales method that allows customers to pay for goods or services over a period of time in installments.