5. THE FOLLOWING ARE ACCOUNTNG PRACTICES USED BY VARIOUS COMPANIES.

1. AS SOON AS IT PURCHASES INVENTORY, HUSKER COMPANY RECORDS THE PURCHASE PRICE AS COST OF GOODS SOLD TO SIMPLIFY ITS ACCOUNTING PROCEDURES.

2. AT THE END OF EACH YEAR, COTEAU COMPANY REPORTS THE VALUE OF ITS BUILDINGS THAT HOUSE ITS OPERATIONS ON ITS BALANCE SHEET BASED ON APPRAISAL VALUES BY EXPERTS.

3. ESKIMO COMPANY RECEIVES ORDERS FROM CUSTOMERS AND RECORDS REVENUE AT THAT TIME, EVEN THOUGH IT HAS NOT YET DELIVERED PRODUCTS OR SERVICES TO ITS CUSTOMERS.

4. LENNY RODEEN COMBINES HIS PERSONAL TRANSACTIONS AND BUSINESS TRANSACTIONS WHEN HE PREPARES HIS COMPANYS FINANCIAL STATEMENTS SO THAT HE CAN DEMONSTRATE HOW WELL HE IS DOING ON AN OVERALL BASIS.

5. NOONAN COMPANY PREPARES FINANCIAL STATEMENTS ONLY EVERY THREE YEARS TO REDUCE ITS COST OF PREPARING THE FINANCIAL STATEMENTS AND A BELIEF THAT MORE ACCURATE FINANCIAL INFO WILL BE REPORTED.

REQUIREMENT: FOR EACH OF THE ABOVE (A-E), IDENTIFY WHICH LEVEL 3 ACCOUNTING ASSUMPTION OR PRINCIPLE IS BEING VIOLATED, AND THEN INDICATE WHAT SHOULD BE DONE TO RECTIFY THE VIOLATION. IF THE ABOVE ACCOUNTING PRACTICE IS CORRECT, IDENTIFY IT AS BEING CORRECT, AND IN THAT CASE, YOU ARE NOT REQUIRED TO DO ANYTHING ELSE.