1. 2. 3. 4. 5.

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the accounting concept that is applied (if you agree) or violated (if you disagree). (10 points) Select and copy the table below to answer: 1. XYZ Company sells farm machinery. Revenue from a large order of machinery from a new buyer was recorded the day the order was received 2. XYZ depreciates the cost of equipment over their expected useful lives. 3. The XYZ Corporation, a company whose securities are publicly traded, prepares monthly, quarterly, and annual financial statements for internal use but disseminates to external users only the annual financial statements. 4. XYZ did not disclose that it was a defendant in a lawsuit because the trial was still in progress. 5. XYZ Corporation's accountant increased the book value of a patent from its original cost of $2 million to its recently appraised value of $4 million. Agree/Disagree Assumption/Constraint/Accounting principle 1 2 3