Identify the assumption represented in each scenario, the decide if it is satisfied or violated
Scenario
Assumption
Satisfied or violated?
Danios Inc. distributes an annual report to shareholders.
Illeo Industries does not regularly prepare financial statements.
Maynard Inc.'s president purchases a car to be used solely for personal purposes with company funds.
Archer Corporation, a publicly traded U.S. company measures financial elements using the dollar.
What will be an ideal response?
Answer:
Scenario
Assumption
Satisfied or violated?
Danios Inc. distributes an annual report to shareholders.
Going Concern
Satisfied
Illeo Industries does not regularly prepare financial statements.
Periodicity
Violated
Maynard Inc.'s president purchases a car to be used solely for personal purposes with company funds.
Economic Entity
Violated
Archer Corporation, a publicly traded U.S. company measures financial elements using the dollar.
Monetary Unit
Satisfied
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The supply chain only includes components dealing with the flow of materials internal to the firm
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