Scenario 1 - Atlas Marketing Consultancy failed to disclose a patent lawsuit filed against them by a competitor. This violates the full disclosure principle as potential investors have a right to know about legal issues that could affect the company's financial status.
Scenario 2 - Miranda wanted to record her employees as an asset on the accounting books since the business funded their training. This violates the monetary unit concept as employees are not controlled monetary assets of the company.
Scenario 3 - Ernie only recorded payments as revenue after receiving payment, not when services were provided. This violates the revenue recognition principle as revenue should be recorded when earned, not when payment is received.
Scenario 1 - Atlas Marketing Consultancy failed to disclose a patent lawsuit filed against them by a competitor. This violates the full disclosure principle as potential investors have a right to know about legal issues that could affect the company's financial status.
Scenario 2 - Miranda wanted to record her employees as an asset on the accounting books since the business funded their training. This violates the monetary unit concept as employees are not controlled monetary assets of the company.
Scenario 3 - Ernie only recorded payments as revenue after receiving payment, not when services were provided. This violates the revenue recognition principle as revenue should be recorded when earned, not when payment is received.
Scenario 1 - Atlas Marketing Consultancy failed to disclose a patent lawsuit filed against them by a competitor. This violates the full disclosure principle as potential investors have a right to know about legal issues that could affect the company's financial status.
Scenario 2 - Miranda wanted to record her employees as an asset on the accounting books since the business funded their training. This violates the monetary unit concept as employees are not controlled monetary assets of the company.
Scenario 3 - Ernie only recorded payments as revenue after receiving payment, not when services were provided. This violates the revenue recognition principle as revenue should be recorded when earned, not when payment is received.
Scenario 1 - Atlas Marketing Consultancy failed to disclose a patent lawsuit filed against them by a competitor. This violates the full disclosure principle as potential investors have a right to know about legal issues that could affect the company's financial status.
Scenario 2 - Miranda wanted to record her employees as an asset on the accounting books since the business funded their training. This violates the monetary unit concept as employees are not controlled monetary assets of the company.
Scenario 3 - Ernie only recorded payments as revenue after receiving payment, not when services were provided. This violates the revenue recognition principle as revenue should be recorded when earned, not when payment is received.
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Scenario 1.
Atlas Marketing Consultancy
didn’t disclose the lawsuit for a
patent filed against them by
their competitor.
Concept or Principle
Violated Full disclosure principle
Revisions Atlas Marketing Consultancy
should disclose the lawsuit for a
patent filed against them by
their competiton because if this lawsuit is because if there is a potential investor, its their right to know if this company's financial status will be affected by said lawsuit
Scenario 2.Miranda insisted that her
employees should be
recognized as an asset of the
business and should be
recorded in the accounting
books. Miranda justifies that,
her business has the best
employees and has undergone
different skills training and
seminars funded by the
business. Concept or Principle
Violated Monetary Unit Concept
Revisions The employees cannot be recorded as an "asset" of the company because they're not controlled by the company itself and these employees aren't necessarily a monetary asset as well
Scenario 3. Ernie imposed a business policy
in which a service transaction
rendered to a customer on
account must be recorded only
after payment was made.
Concept or Principle
Violated Revenue Recognition Principle
Revisions Ernie should only record a payment as "revenue" once their service has been provided because the payment that was given to them in advance by the costumer is still considered as a "liability"
Scenario 4. The bookkeeper of Manny
Builders recorded the personal
transactions of the owner in
the business’ books. The
bookkeeper justifies that it is
valid because the transaction
was made by the owner of the
business.
Concept or Principle
Violated Business Entity Concept
Revisions The bookkeeper of Manny
Builders should recorded the personal
transactions of the owner on its own as his personal expenses seperate of
the business’ books.
Scenario 5. Madonna paid in advance
₱100,000.00 for two years
worth of office rent. She
recorded the first year rent
expense in the accounting
books at ₱100,000.00, justifying
that this is what was paid.
Concept or Principle
Violated Matching Principle Revisions
5. Madonna paid in advance
₱100,000.00 for two years
worth of office rent. She should
record the year rent
expense in the accounting
books at ₱100,000.00 to 2013-2014
or just record it as P50,000 to 2013 and another P50,000 to 2014 so the financial data isnt too
