Concept explainers
Basic assumptions and principles
• LO1–8, LO1–9
Identify the accounting concept that was violated in each of the following situations.
1. Pastel Paint Company purchased land two years ago at a price of $250,000. Because the value of the land has appreciated to $400,000, the company has valued the land at $400,000 in its most recent
2. Atwell Corporation has not prepared financial statements for external users for over three years.
3. The Klingon Company sells farm machinery. Revenue from a large order of machinery from a new buyer was recorded the day the order was received.
4. Don Smith is the sole owner of a company called Hardware City. The company recently paid a $150 utility bill for Smith’s personal residence and recorded a $150 expense.
5. Golden Book Company purchased a large printing machine for $1,000,000 (a material amount) and recorded the purchase as an expense.
6. Ace Appliance Company is involved in a major lawsuit involving injuries sustained by some of its employees in the manufacturing plant. The company is being sued for $2,000,000, a material amount, and is not insured. The suit was not disclosed in the most recent financial statements because no settlement had been reached.

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Chapter 1 Solutions
Loose Leaf Intermediate Accounting
- Please provide the correct answer to this financial accounting problem using accurate calculations.arrow_forwardI am trying to find the accurate solution to this general accounting problem with the correct explanation.arrow_forwardI need assistance with this general accounting question using appropriate principles.arrow_forward
- Can you help me solve this general accounting question using the correct accounting procedures?arrow_forwardCan you help me solve this general accounting problem with the correct methodology?arrow_forwardCan you solve this general accounting question with the appropriate accounting analysis techniques?arrow_forward
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
