A small café buys a coffee machine for RM5,000. The machine is recorded as RM5,000, even if its market value later increases or decreases.

Employee happiness is important, but it cannot be recorded in accounting.

A tuition centre expects a student to pay RM1,000, but the student has not paid for months.
The centre assumes the money may not be collected and records a possible loss rather than showing higher profit.

A business records its expenses monthly.

It should continue using monthly recording every year, not switch to yearly just to make profits look better.

If the owner uses business money to buy personal groceries, it must be recorded as owner’s drawings, not a business expense.

A bakery earns money by selling cakes in March.
The cost of flour and sugar used to make those cakes should also be recorded in March, not in another month.

A shop buys furniture and plans to use it for many years.
This assumes the business will continue operating, not close down next month.

An internet bill for December is received in January.
The expense is recorded in December, because the service was used in December.

A company buys a pen for RM2.
Instead of recording it as an asset, it is treated as an expense because the amount is too small to affect decisions.