Reference no: EM132608006

Question (a) The accounting practices in each of the following situations are in accordance with accounting standards and accepted good practices. Identify all the accounting concepts and principles that form the basis for each accounting practice. Provide an explanation as to why they apply.

(i) A pet shop accrues employee salaries at year end even though the salaries will be paid during the first few days of the new year.

(ii) Assets are reported at liquidation value on the financial statements of a supermarket that is going out of business.

(iii) Depreciation of the head office building is difficult to relate to particular sales. Therefore, the firm records depreciation expense on a time basis.

(iv) A busines wishes to change its method of accounting for revenue. However, the business does not switch because it wants to use the same accounting method that other businesses in the industry use.