TEST II. Instructions. Indicate which concepts/principles are violated. Support your answer 1. Purchased a hammer at a cost of P500. This was recorded as an asset and expense to decrease its value by P50 per year for 10 years. 2. The owner-manager bought a computer for personal use. The invoice was given to the accountant who recorded it as an asset of the business. 3. Aside from owning a shoe store, Albert operates a canteen. The assets of the canteen are reported in the statement of financial position of the shoe store. 4. No financial statements were prepared by Michael Go for his business. He explained that he will prepare the statements when he closes the business, which he predicts to take place after 20 years. 5. The statement of financial position of a company included an equipment purchased from Japan for 350,000 yen. It was reported at that amount in the statement of financial position while all the other assets were renorted in Philippine pesos

TEST II. Instructions. Indicate which concepts/principles are violated. Support your answer 1. Purchased a hammer at a cost of P500. This was recorded as an asset and expense to decrease its value by P50 per year for 10 years. 2. The owner-manager bought a computer for personal use. The invoice was given to the accountant who recorded it as an asset of the business. 3. Aside from owning a shoe store, Albert operates a canteen. The assets of the canteen are reported in the statement of financial position of the shoe store. 4. No financial statements were prepared by Michael Go for his business. He explained that he will prepare the statements when he closes the business, which he predicts to take place after 20 years. 5. The statement of financial position of a company included an equipment purchased from Japan for 350,000 yen. It was reported at that amount in the statement of financial position while all the other assets were renorted in Philippine pesos

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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