accounting-assignment - The first transaction applies to money measurement concept but it is not compliance Because the employees have been included in

accounting-assignment - The first transaction applies to...

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The first transaction applies to “money measurement” concept, but it is not compliance. Because the employees have been included in the financial statement as on asset. It occurs normally because if employees work very well, their monetary value will be increasing. But they are included in an asset is good for company. So many financial statements normally include employees. Therefore, this example is different between money measurements concept, because money measurement concept applies most employees but this example applies key employees. This concept can never tell us everything such as business has good or bad managers, whether there are serious problems with the workforce, however, if only key employees included in financial statement, everyone can know who is the good manager. The second transaction applies to “Going concern” concept, but it has been violated. The company recently purchased an electronic fax machine worth $500, they have included that in the balance sheet as a fixed asset. However, the machine worth is not going to concern, the really concern is the cost price. So the company should count the fax machine cost less accumulated depreciation as their fix assets, is not count the machine worth. This concept implies that the business will continue to operate for the foreseeable future. It assumes that the owners of a company intend to continue its trading over the long term (at least 12 more months). It that is not the case, they will

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