Indicate the principle/s violated:No financial statements were prepared by Michael Go for his business, He explained that he will prepare the statements when he closes the business, which he predicts to take place after 20 years.The owner-manager bought a computer for personal use. The invoice was given to the accountant who recorded it as an asset of the business.Aside from owning a shoe store, Albert operates a canteen. The assets of a canteen are reported in the statement of financial position of the shoe store.Purchased a hammer at a cost of PHP500. This was recorded as an asset and expense to decrease its value by PHP50 per year for 10 years.A food company ordered a machine needed in the assembly line of its production department. Upon order, the machine was immediately listed as one of its assets.

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Answered: Indicate the principle/s violated: No…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Indicate the principle/s violated:

No financial statements were prepared by Michael Go for his business, He explained that he will prepare the statements when he closes the business, which he predicts to take place after 20 years.
The owner-manager bought a computer for personal use. The invoice was given to the accountant who recorded it as an asset of the business.
Aside from owning a shoe store, Albert operates a canteen. The assets of a canteen are reported in the statement of financial position of the shoe store.
Purchased a hammer at a cost of PHP500. This was recorded as an asset and expense to decrease its value by PHP50 per year for 10 years.
A food company ordered a machine needed in the assembly line of its production department. Upon order, the machine was immediately listed as one of its assets.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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