Determine what accounting assumption principle

Assignment Help Financial Accounting

Reference no: EM132475196

Question 1. Assume that you have received copies of the financial statements for PepsiCo for the years ending December 31, 2014 and 2013. Answer the following questions:

A) If you were a banker, why would you need information from PepsiCo's financial statements?

B) If you were a potential investor in PepsiCo stock, what information would you want from their financial statements?

C) If you were a labor negotiator for a union that represents a group of PepsiCo's employees, which financial statement would provide you with the most useful information?

Question 2. Determine what accounting assumption principle has been violated in each situation below:

Melissa is the owner of Missy's Tea Shop, a sole proprietorship. She purchases a new computer for her personal use at home. Melissa records the computer as an asset of Missy's Tea Shop.
Houston Electronics purchased an office building several years ago for $500,000. The office building could be sold today for $850,000. The accountant will now show the building as an asset on the books for $850,000.
Henry is a new accountant for Acme Foods. He is extremely busy and has decided that he can prepare the financial statements every two years.
The Candle Store is having financial problems. It has no plans to liquidate, but decides to use market value to report their assets since they plan on moving to a smaller store.

Attachment:- accounting pronciple.rar

Reference no: EM132475196

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