Here are some accounting reporting situations:

(a) Tercek Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain.

(b) Bonilla Company is in its fifth year of operation and has yet to issue financial statements. (Do not use the full disclosure principle.)

(c) Barton, Inc. is carrying inventory at its current market value of $100,000. Inventory had an original cost of $110,000.

(d) Ravine Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Property, plant, and equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely.

(e) Watts Company has inventory on hand that cost $400,000. Watts reports inventory on its balance sheet at its current market value of $425,000.
(£) Steph Wolfson, president of the Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited the “computers” account.
Instructions For each situation, list the assumption, principle, or constraint that has been violated, if any. Some of these assumptions, principles, and constraints were presented in earlier chapters. List only one answer for each situation.