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Question - The following accounting issues relate to Downing Ltd for the year ended 31st Dec 2019.
1. They business is unable to meet suppliers' obligation as they fall due, and also has court case relating to money laundering. If convicted the company operation must terminate.
2. The company office premises are leasehold and the management do not want to reflect the obligation underlying the lease contract
3. Customers deposits have accumulated and the company ability to deliver is in question, they directors propose a change of accounting policy to a more aggressive revenue policy
4. The directors have a disciplinary matter relating to false claim of meeting allowance for Ksh 15800. The company total directors allowance increased by 300% to Ksh 1.89 billion.
5. A major debtor of the company is having cash flow problem and cash recovery is doubtful
Required - Explain the accounting principles and concepts applicable in the above practices.
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