counting reports. 2. Benjamin Company includes in its accounting records only transaction data that can be expressed in terms of money. 3. Josh Burke, owner of Josh’s MovieHouse, records his personal living costs as expenses of the MovieHouse. Instructions For each of the three situations, say if the accounting method is current or incorrect. If correct, identify which principle or assumption supports the method used. If incorrect, identify which
The following situations involve accounting principles and assumptions.
1. Virtue Company owns land that is worth substantially more than it originally cost. To provide more relevant information, Virtue reports the land at market value in its accounting reports.
2. Benjamin Company includes in its accounting records only transaction data that can be expressed in terms of money.
3. Josh Burke, owner of Josh’s MovieHouse, records his personal living costs as expenses of the MovieHouse.
Instructions
For each of the three situations, say if the accounting method is current or incorrect. If correct, identify which principle or assumption supports the method used. If incorrect, identify which principle or assumption has been violated.
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