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Homework answers / question archive / JUS Check my work 6 Identify which accounting principle or assumption best describes each of the following practices: 1
JUS Check my work 6 Identify which accounting principle or assumption best describes each of the following practices: 1. Mike Derr owns both Sailing Passions and Dockside Digs. In preparing financial statements for Dockside Digs, Mike makes sure that the expense transactions of Sailing Passions are kept separate from Dockside Digs's transactions and financial statements 2. If $51 thousand cash is paid to buy land, the land is reported on the buyer's balance sheet at $51 thousand. 3. Stark Company's accounting system maintains the equipment account as if the business will continue operating and not close. eBook Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Mike Derr owns both Sailing Passions and Dockside Digs. In preparing financial statements for Dockside Digs, Mike makes sure that the expense transactions of Sailing Passions are kept separate from Dockside Digs's transactions and financial statements. Identify which accounting principle or assumption best describes the above practice
rs in the tabs below. 5. In preparing financial statements for Dockside Digs, Mike makes sure that the ate from Dockside Digs's transactions and financial statements. Ehe above practice ed 1 Required 2 Business entity assumption Expense recognition (matching) principle General accounting principle Going-concern assumption Measurement (cost) principle Revenue recoanition principle
1.Business entity Assumption.
This principle states that transactions related to variours organisation should be recorded separately and transaction which effect the particular business only taken into account.So mike followed this principle while preparing the financial statements.
2.Measurement (Cost) Principle
It states that asset should be recorded at cost only.So land was recorded at cost of $51 thousandT
3.Going concern assumption
It is the basic principle of accounting that organisation continue to operate in coming future(years) and accounting of transactions performed accordingly.
