E1-4 - the buildings at market value in its reports. 2....

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The following situations involve principles and assumptions. Instructions For each of the three situations, say if the method used is correct or incorrect. If correct, identify which principle or assumption supports the method used. If incorrect, identify which principle or assumption has been violated. 1. Grossman Company owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Grossman reports
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Unformatted text preview: the buildings at market value in its reports. 2. Jones Company includes in its accounting records only transaction data that can be expressed in terms of money. 3. Caleb Borke, owner of Caleb's Cantina, records his personal living costs as expenses of the Cantina. Method Principle/Assumption 1. Incorrect Cost principle 2. Correct Monetary unit assumption 3. Incorrect Economic entity assumption...
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This note was uploaded on 07/31/2011 for the course ACCT 557 taught by Professor Kahn during the Spring '10 term at Strayer.

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