Reference no: EM132643154

Presented below are procedures and practices followed by Maybe Company.

A. Because the company's income is low this year, Maybe switched from accelerated depreciation to straight-line depreciation.

B. The president of Maybe believes it is foolish to report financial information on a yearly basis. She believes that financial information should be disclosed only when significant new information is available related to the company's operations.

C. Maybe decides to establish a large loss and related liability this year because of the possibility that it may lose a pending lawsuit. The possibility of loss is considered remote by the corporation's lawyers.

D. One of the corporation's executives purchased a new home computer for personal use with company money, charging Miscellaneous Expense.

E. The corporation has not established an Allowance for Doubtful Accounts, even though there are a significant number of their accounts that are either slow paying or may not pay their debts in full.

Required

Problem 1: For each of these, state the assumption, principle, or qualitative characteristic that is violated. Please clearly label each answer.