Reference no: EM133029548

For each situation listed below identify which principle, concept or assumption has been violated: 

1. It is now the end of 2017 and Priestly Co. is preparing its annual financial statements. The company has been experiencing severe financial difficulties and management anticipates that the company will cease operations in 2018 but this is not disclosed in the financial statements.
2. Steph Connors runs a small business. All receipts from the business are deposited into Jeff's personal bank account and all Jeff's expenses, both personal and business, are paid out of this same account. Jeff makes no attempt to maintain separate records for the business.
3. Charlie deals with foreign suppliers who invoice the company in U.S. dollars. Charlie normally records the amounts in the accounting records as displayed in the invoice since the exchange rate is often similar to the Canadian dollar.
4. Charlie often receives deposits for contracts to be completed in the following fiscal year. He reports all deposits as revenue once the cash is received.
5. James Smith, the owner of Smith's Travel is thinking of retiring in two years because the business is not as successful as he had hoped. James has always been very careful to ensure that all assets and liabilities are recorded correctly. However, since he is thinking of retiring, James decides that generally accepted accounting principles are no longer relevant, so he does not double check his work as carefully as he did previously.