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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

1. If MKH Company sold land in 20X1 for $45,000 that had a book value of $50,000, what amount of loss on the sale of land should be recorded in the journal entry?

$45,000

$5,000

$50,000

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Verified step by step guidance

Understand the concept of 'loss on sale of an asset': A loss occurs when the selling price of an asset is less than its book value (the value recorded in the company's books).

Identify the book value of the land: The problem states that the book value of the land is $50,000.

Identify the selling price of the land: The problem states that the land was sold for $45,000.

Calculate the loss: Subtract the selling price from the book value using the formula: Loss = Book Value - Selling Price. In MathML, this can be expressed as

Loss = Book Value - Selling Price

Record the journal entry: Debit the 'Loss on Sale of Land' account for the calculated loss amount, credit the 'Land' account for its book value, and debit the 'Cash' account for the selling price.