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rinciples                               Economic Entity Assumption   Monetary Unit Assumption   Historical Cost Principle           Going Concern Assumption   Revenue Recognition Principle   Full Disclosure Principle           Time Period Assumption

rinciples                               Economic Entity Assumption   Monetary Unit Assumption   Historical Cost Principle           Going Concern Assumption   Revenue Recognition Principle   Full Disclosure Principle           Time Period Assumption

Century 21 Accounting General Journal
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 1AFE
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Listed below are the current Accounting Assumptions and Principles          
                   
Economic Entity Assumption   Monetary Unit Assumption   Historical Cost Principle          
Going Concern Assumption   Revenue Recognition Principle   Full Disclosure Principle          
Time Period Assumption   Matching Principle              
                   
Required:                  
For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable.                  
d. Moss Corporation closes the books each month and prepares monthly financial statements.
               
Violation: (Yes/No)            
Applicable Assumption/Principle:            
               
e. Carroll Corporation, a US company, purchased a machine from Germany for 10,000 Euros and recorded the machine on their books at $12,000 US
               
Violation: (Yes/No)            
Applicable Assumption/Principle:            
               
f. Machine repairs of $6,000 were incurred on June 15. The company recorded the expense on the books in July.
               
Violation: (Yes/No)            
Applicable Assumption/Principle:            
               
g. Buckner Corp is being sued for $1,000,000. There is a probable chance they will lose. The company disclosed this fact in their notes to their financials.
               
Violation: (Yes/No)            
Applicable Assumption/Principle:            
               
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