APPLICATION GAAP

Directions: Identify the basic accounting assumption, concept, or principle that must be applied in various events.

Ruby Ochoa, owner of Rainbow Nailposh purchased school supplies for her daughter.

Identify the basic accounting assumption, concept, or principle that must be applied in various events presented below.

Rainbow Nailposh purchased an equipment ten years ago and was combined and shown with the business’ recent purchases.

What basic accounting assumption, concept, or principle is this event?

Rainbow Nailposh purchased a POS system and register for ₱15,000 in SM East, but it could have been purchased online for ₱13,000.

Directions: Identify the basic accounting assumption, concept, or principle that must be applied in various events presented below.

Rainbow Nailposh is facing a lawsuit from a dissatisfied customer and it is probable that Rainbow Nailposh will lose the case.

What basic accounting assumption, concept, or principle is this event?

Rainbow Nailposh has a gross monthly income of ₱150,000. The accountant after examining the business’ book discovered that Rainbow Nailposh bought a puncher with a cost of ₱200 and an estimated useful life of 3 years. The amount of purchase was recorded as an outright expense.