For Each of the Independent Situations Described Below, List the Assumption

question 22

Essay

For each of the independent situations described below, list the assumption, concept, constraint or recognition criteria that have been violated, if any. List only one term for each case.
1. Mark McDougal, MD, had the clinic accountant prepare his personal tax return. He paid the accountant using clinic funds and debited the clinic's "Professional Fees" account.
2. Won Company does not use an account for allowance for doubtful accounts. Instead, accounts receivable are written off directly to Bad Debt Expense if they remain unpaid after 24 months.
3. Equipment is carried at its fair value on the Fontaine Company balance sheet, which is $25,000 higher than cost. Fontaine Company has not adopted the revaluation model for accounting for long-lived assets.
4. Depreciation Expense for the Sobowski Company is $15,000. The company will have a net loss of $12,000 if the Depreciation is recorded, but a Profit of $3,000 if Depreciation is deferred a year. The decision is made to defer the Depreciation to next year which is expected to be more profitable.
5. The land of Krypto Company is appraised at $200,000 more than its cost. The new accountant for the company recommends booking the appraised value and showing a "Gain from Revaluation" on the Income Statement. Krypto Company has not adopted the revaluation model for accounting for long-lived assets.

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Definitions:

Decimal Equivalents

Numeric values expressed in decimal form that represent fractions, percentages, or other quantities for easier calculations.

Percent Equivalents

Numerical values that represent the same proportions as percentages, allowing for simpler comparisons and calculations.

Decimal Equivalents

Numerical values expressed in decimal form that correspond to fractions or percentages.

Percent Equivalents

Representations of fractions or ratios as percentages, useful for comparing proportions.