Daniel bought abrand-new truck for his landscaping business. He paid $30,000, the full amount up front. Assuming there is no salvage value, he plans to use it for 10consecutive years. His assistant records this transaction on the balance sheet as equipment for $30,000on the day ofthe purchase.He had expensed the whole amount on the day of purchase.

After two years of owning his truck, Daniel decided to apply for a loan andmet with Mr. Thompkins, the bankloan officer. A few minutes into the appointment, Danielgavehimhis company's balance sheet.Mr. Thompkinsasked Danielseveralquestions about how the information wasprovided.Daniel said he would contacthimin a fewdays withthe requested information. Daniel claimed that he was using GAAP. Help Daniel to answer the loan officer's questions. Provide your assistance inyour initial post:

• Which accounting method was used? Explain why you believe this method was used.
• Has his assistant recorded equipment correctly? Explain your answer.
• Please explain the GAAP principle that applies to this scenario.