Violations of Assumptions and PrinciplesThe following are accounting procedures and practices used by severalcompanies. A. As soon as it purchases inventory, Sokolich Company records thepurchase price as cost of goods sold to simplify its accountingprocedures.B. At the end of each year, Sloan Company records and reports the value of its land based on appraisal values.C. Ebert Company prepares financial statements only every twoyears to reduce its costs of preparing the statements.D. Guthrie Company receives orders from customers and recordsrevenue at that time, even though it has not yet delivered products or services to the customers.E. Because of inflation, Cross Company adjusts its financialstatements each year to show the current purchasing power for allitems. F. David Thomas combines his personal transactions and businesstransactions when he prepares his company's financial statementsso that he can tell how well he is doing on an "overall" basis.G. At the end of each year, Vann Company reports its economicresources on a liquidation basis even though it is likely tooperate in the future. Required:Identify what accounting assumption or principle each procedure orpractice violates, and indicate what should be done to rectify theviolation.

Violations of Assumptions and Principles
The following are accounting procedures and practices used by several
companies.

A. As soon as it purchases inventory, Sokolich Company records the
purchase price as cost of goods sold to simplify its accounting
procedures.
B. At the end of each year, Sloan Company records and reports the

value of its land based on appraisal values.
C. Ebert Company prepares financial statements only every two
years to reduce its costs of preparing the statements.
D. Guthrie Company receives orders from customers and records
revenue at that time, even though it has not yet delivered

products or services to the customers.
E. Because of inflation, Cross Company adjusts its financial
statements each year to show the current purchasing power for all
items.

F. David Thomas combines his personal transactions and business
transactions when he prepares his company's financial statements
so that he can tell how well he is doing on an "overall" basis.
G. At the end of each year, Vann Company reports its economic
resources on a liquidation basis even though it is likely to
operate in the future.

Required:
Identify what accounting assumption or principle each procedure or
practice violates, and indicate what should be done to rectify the
violation.