Question

Learning Task 4: Below are a number of accounting procedures and practices in
Pros pere General Merchandise. For each of these items, list the assumption,
principle, information characteristic, or convention that is violated. Write your
answer in your notebook.
1. The company prepares financial reports are based on the SFAS promulgated
by the ASC
2. The assets and owner's equity are reported at fair value but business obliga-
tions are reported at historical cost.
3. The company maintains only one employee to function as accountant, inter-
nal auditor, collector and treasurer.
4. The financial reports are always delayed.
5. Due to recession, estimated future earnings are reported in the current finan-
cial reports of Prospere General Merchandise.
6. The accounting methods and procedures used are regularly changed semi-
annually.
7. The accountant records transactions as desired by the owner without proper
supporting documents.
8. The financial reports do not include minutes of the meeting, business con-
tracts, and future plans because they not financial in nature.
9. The company refuse to be audited by an external auditor because it has al-
ready an internal auditor who religiously verifies the financial reports.
10. The company acquired a refillable pentel amounting to P200 and depreciated
it because its estimated life is good for five years.​

Answer 1

Answer:

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