If a Parcel of Land That Was Originally Purchased for $85,000

question 75

Multiple Choice

If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000, the land account transaction amount to handle the sale of the land in the seller's books is:

• A) $85,000 increase.
• B) $85,000 decrease.
• C) $137,000 increase.
• D) $137,000 decrease.
• E) $140,000 decrease.

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Definitions:

Conceptual Framework Project

A systematic approach to developing a set of concepts that guide the creation, interpretation, and application of financial reporting and accounting standards.

Objectives of Financial Reporting

The goal of providing financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions about providing resources to the entity.

FASB

An abbreviation for Financial Accounting Standards Board, the organization responsible for establishing accounting and financial reporting standards in the United States.