Burr Publishers purchased a building on March 20, 20Y1, for $160,000. Other amounts related to this purchase are as follows:
Price listed by seller on Jan. 1, 20X1, $180,000
Burr Publishersâ€™ initial offer to buy on Jan. 31, 20X1, $140,000
Purchase price on Mar. 20, 20X1, $160,000
Estimated selling price on Dec. 31, 20X3, $220,000
Assessed value for property taxes, Dec. 31, 20X3, $190,000
1. Which amount related to this purchase should be recorded in the accounting records?
a. 220,000.
b. 180,000.
c. 140,000.
d. 160,000.
2. The resources owned by a business are its _.
a. liabilities.
b. owner's equity.
c. assets.
d. none of these choices are correct.
3. The rights and claims of creditors on a company's assets are represented by _.
a. liabilities.
b. owner's equity.
c. assets.
d. none of these choices are correct.
4. Which element of the accounting equation represents the rights of owners?
a. liabilities.
b. owner's equity.
c. assets.
d. none of these choices are correct.

According to the historical cost principle, assets must be recorded at their original purchase price, only accumulated depreciation can adjust their value.

2. The resources owned by a business are its _____.

c. assets.

Assets are all the resources a business uses to carry out their normal business activities and operations.

3. The rights and claims of creditors on a company's assets are represented by _____.

a. liabilities.

Liabilities represent all the debts that a company has.

4. Which element of the accounting equation represents the rights of owners?

b. owner's equity.

Equity refers to the part of a company owned by its stockholders or owners. A company can finance itself through all equity, or it can have a mixed financing structure with equity and debt (liabilities). The investment made by the owners of a company is represented by the equity part of the balance sheet.