accounting principle being violated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
What accounting principle being violated in the problem presented? Is it right decision for Hannah to record the supposed to be drawings as expenses? Justify your answer
Transcribed Image Text:Directions: Analyze the problem carefully and answer the questions that follow.
Write your answers on a separate sheet of paper.
Hannah Mae Vista graduated as summa cum laude with the degree of B.S.
Accountancy and got her job through her brother's recommendation. She has served
as an accountant on Vista Accounting Firm for three years. She has been very
passionate about her work since it was her dream to be an accountant. One day,
when she was doing the financial reports of the company, she noticed that the debit
and the credit sides were not balanced. She kept finding the errors but found none.
Unexpectedly, Hannah's boss approached and told her that he got cash amounting
To Php 100.000.00 for personal usc but he refused to record it as drawings or
withdrawals. Her boss wanted to record rhe Phn 100.000.00 as expenses even thotis"
it was used for his personal obligations.
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