Accounting Concepts-Identification. Presented Below Are a Number of Accounting Procedures and Practices

question 140

Essay

Accounting concepts-identification.
Presented below are a number of accounting procedures and practices in Ramirez Corp. For each of these items, list the assumption, principle, information characteristic, or modifying convention that is violated.
1. Because the company's income is low this year, a switch from accelerated depreciation to straight-line depreciation is made this year.
2. The president of Ramirez Corp. believes it is foolish to report financial information on a yearly basis. Instead, the president believes that financial information should be disclosed only when significant new information is available related to the company's operations.
3. Ramirez Corp. decides to establish a large loss and related liability this year because of the possibility that it may lose a pending patent infringement lawsuit. The possibility of loss is considered remote by its attorneys.
4. An officer of Ramirez Corp. purchased a new home computer for personal use with company money, charging miscellaneous expense.
5. A machine, that cost $40,000, is reported at its current market value of $45,000.

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Definitions:

Promotions

The advancement of an employee's rank or position in an organizational hierarchy system.

Psychological Withdrawal

An employee's disengagement and lack of psychological presence at work, often manifesting as daydreaming, socializing, or looking for other jobs during work hours.

Organizational Commitment

The degree to which an employee identifies with the organization and is willing to put forth effort on its behalf.

Psychological Job Withdrawal

A process by which employees detach from their work roles, often manifesting through reduced engagement, effort, and commitment.