Question

4. Give the assumption or principle that would have been violated if the following entries or information had not been given: a. An Adjustment is made for Depreciation at the EFY: b. Pre-paid Insurance is an Asset account and is adjusted at EFY to reflect how much has been used up. c. Changing inventory valuation methods is not allowed. d. Recording Interest the company has earned on a Notes Receivable at EFY even though it has not been received. e. Owners are not allowed to co-mingle their personal funds with their business funds.



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