1. In order to save time and reduce paperwork, Mr.X keeps only one set of records, combining his personal and business records. Accounting assumption or convention violated?
2.Because management wants to make a good impression upon the corporation’s stockholders, management has decided to list the land on the balance sheet at its current market value which is twice as much as the corporation paid for the land when it was purchased five years ago.
Accounting assumption or convention violated?
3.A lawsuit has been filed against the company seeking $50 million in damages for customer injuries. Because management is concerned that news of the lawsuit would depress the price of the company’s stock, they have decided to keep the lawsuit a secret from their stockholders.
Accounting assumption or convention violated?
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Indicate Which Accounting Assumption Or Conventions Have Been Violated In The Following Situations And Justify?
Posted on 16 March 2011.
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