Question

Mention the accounting principle/concept/assumption which is violated in the
following cases and explain it :
(1) Mohan the owner of a business receives an order for supply worth
* 2,00,000. He has also received * 25,000 against this order. Mohan records
it as a sale.
(2) Purchase of Pen, Pencils, Small calculator are shown as an Asset in
Financial Statements.​

Answer 1

Answer:

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Explanation:

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Answer 2

Explanation:

No, he will not be correct in recording it as sales because the goods have not been delivered as yet and hence the sale is not completed. Mohan has not earned the revenue so far. Under the matching concept, revenue is recognised as earned only when cost incurred to earn that revenue is also recognised as expense in that period.