Indicate the assumption or principle that is most clearly violated using the following terms, chosen from the terms listed: 1. Dollar Saver has 20,000 Model 44G cell phones in inventory at a cost of $64 each. Due to the advancement of technology and newer models available, only 4 of Model 44G phones were sold last month. To avoid recognizing a loss on writing off this inventory, Dollar Saver has decided not to issue financial statements until at least half of the remaining Model 44G phones have been sold. select an appropriate term 2. Homer Bates, president of Bates Machinery, took an iPod Touch case out of inventory to use as a birthday present for his son. The cost was debited to Supplies Expense. select an appropriate term 3. Wilson, Inc. made no entry to record depreciation on its equipment for 2014. select an appropriate term 4. Stockholders invested an additional $43,000 cash in the business in 2014. This investment was reported as revenue on the 2014 income statement. select an appropriate term 5. Toys, Inc. is being liquidated because it has sustained losses for the past few years. It continues to depreciate its assets and prepare financial statements on the cost basis. select an appropriate term 6. Counters Galore values its pre-made granite it has on hand at its expected selling price since this is the amount the company will receive from customers when it sells the counters to customers. The granite's expected selling price exceeds the price Counters Galore paid for it. select an appropriate term 7. Rand Enterprises developed a fuel cell that will run on sea water, while providing equal performance to other fuels. Rand has chosen to defer the release of the new product to the public until it has enough capital to fund the production. select an appropriate term 8. Darzion Products reports its inventory based on euros for its stores in Great Britain when issuing financial statements for British banks when loans are needed. select an appropriate term 9. Dalani Water bought 700 new desk chairs, one for each of its employees. Each chair cost $180 and was decorated with the company's logo. Dalani’s policy is to expense all assets costing less than $200. Dalani recorded the cost of the chairs as an expense due to its policy.

Indicate the assumption or principle that is most clearly violated using the following terms, chosen from the terms listed: 1. Dollar Saver has 20,000 Model 44G cell phones in inventory at a cost of $64 each. Due to the advancement of technology and newer models available, only 4 of Model 44G phones were sold last month. To avoid recognizing a loss on writing off this inventory, Dollar Saver has decided not to issue financial statements until at least half of the remaining Model 44G phones have been sold. select an appropriate term 2. Homer Bates, president of Bates Machinery, took an iPod Touch case out of inventory to use as a birthday present for his son. The cost was debited to Supplies Expense. select an appropriate term 3. Wilson, Inc. made no entry to record depreciation on its equipment for 2014. select an appropriate term 4. Stockholders invested an additional $43,000 cash in the business in 2014. This investment was reported as revenue on the 2014 income statement. select an appropriate term 5. Toys, Inc. is being liquidated because it has sustained losses for the past few years. It continues to depreciate its assets and prepare financial statements on the cost basis. select an appropriate term 6. Counters Galore values its pre-made granite it has on hand at its expected selling price since this is the amount the company will receive from customers when it sells the counters to customers. The granite's expected selling price exceeds the price Counters Galore paid for it. select an appropriate term 7. Rand Enterprises developed a fuel cell that will run on sea water, while providing equal performance to other fuels. Rand has chosen to defer the release of the new product to the public until it has enough capital to fund the production. select an appropriate term 8. Darzion Products reports its inventory based on euros for its stores in Great Britain when issuing financial statements for British banks when loans are needed. select an appropriate term 9. Dalani Water bought 700 new desk chairs, one for each of its employees. Each chair cost $180 and was decorated with the company's logo. Dalani’s policy is to expense all assets costing less than $200. Dalani recorded the cost of the chairs as an expense due to its policy.

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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Question

Indicate the assumption or principle that is most clearly violated using the following terms, chosen from the terms listed:

9. Dalani Water bought 700 new desk chairs, one for each of its employees. Each chair cost $180 and was decorated with the company's logo. Dalani’s policy is to expense all assets costing less than $200. Dalani recorded the cost of the chairs as an expense due to its policy.
1. Dollar Saver has 20,000 Model 44G cell phones in inventory at a cost of $64 each. Due to the advancement of technology and newer models available, only 4 of Model 44G phones were sold last month. To avoid recognizing a loss on writing off this inventory, Dollar Saver has decided not to issue financial statements until at least half of the remaining Model 44G phones have been sold.		select an appropriate term
2. Homer Bates, president of Bates Machinery, took an iPod Touch case out of inventory to use as a birthday present for his son. The cost was debited to Supplies Expense.		select an appropriate term
3. Wilson, Inc. made no entry to record depreciation on its equipment for 2014.		select an appropriate term
4. Stockholders invested an additional $43,000 cash in the business in 2014. This investment was reported as revenue on the 2014 income statement.		select an appropriate term
5. Toys, Inc. is being liquidated because it has sustained losses for the past few years. It continues to depreciate its assets and prepare financial statements on the cost basis.		select an appropriate term
6. Counters Galore values its pre-made granite it has on hand at its expected selling price since this is the amount the company will receive from customers when it sells the counters to customers. The granite's expected selling price exceeds the price Counters Galore paid for it.		select an appropriate term
7. Rand Enterprises developed a fuel cell that will run on sea water, while providing equal performance to other fuels. Rand has chosen to defer the release of the new product to the public until it has enough capital to fund the production.		select an appropriate term
8. Darzion Products reports its inventory based on euros for its stores in Great Britain when issuing financial statements for British banks when loans are needed.		select an appropriate term

Comparability
Expense recognition principle
v Full disclosure principle
Revenue recognition principle
Materiality
Cost principle
Periodicity assumption
No violation of operating guidelines
Economic entity assumption
Monetary unit assumption
Going concern assumption

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