Identify the assumption represented in each scenario, the decide if it is satisfied or violated
Scenario
Assumption
Satisfied or violated?
Poseidon Corporation is a publicly traded company. They only issue financial statements to external users every other year.
Charmed Inc. adds land purchased in 2014 to the balance of land purchased in 2000.
Smith Corp pays the CEO's mortgage and records it as miscellaneous expense.
Caesar & Company depreciates property, plant, and equipment over their useful lives.
What will be an ideal response?
Answer:
Scenario
Assumption
Satisfied or violated?
Poseidon Corporation is a publicly traded company. They only issue financial statements to external users every other year.
Periodicity
Violated
Charmed Inc. adds land purchased in 2014 to the balance of land purchased in 2000.
Monetary Unit
Satisfied
Smith Corp pays the CEO's mortgage and records it as miscellaneous expense.
Economic Entity
Violated
Caesar & Company depreciates property, plant, and equipment over their useful lives.
Going Concern
Satisfied