Each of the following statements violates a concept or convention of accounting.Write the letter in the blank next to each statement corresponding to the concept or convention violated.
_____ 1.A note to the financial statements indicating a change in inventory methods is omitted.
_____ 2.When management is unsure of which estimates to use in a given situation,the estimate resulting in the largest net income is always used.
_____ 3.In 20x5,a company uses straight-line depreciation and in 20x6 the company uses declining-balance depreciation.
_____ 4.A small company expenses all expenditures under $10,000.
_____ 5.A small company purchases a $50,000 computer to save $3,000 per year in bookkeeping wages.
Definitions:
Final Statement
A document summarizing all the terms, conditions, fees, and charges at the closing of a financial transaction.
Written Contract
A formal agreement between parties that is expressed in written form and is legally binding.
Exclude Evidence
A legal process to prevent certain information or materials from being presented in court, often due to irrelevance or violation of rules.
Final Statement
The conclusive summary or account statement that represents the last in a series, detailing final balances or outcomes.
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