1. Mr. Ahmad has established a small craft shop in Salalah. Presented below is two of accounting procedures and practices in his business. For each of these items, list and explain the assumption, principle, information characteristic, or modifying convention that is violated.

1. Mr. Ahmad purchased a new home computer for personal use with company money, charging miscellaneous expense. (1 Mark)
2. A machine, that cost OMR 4,000, is reported at its current market value of OMR 4,500. (1 Mark)

2. Mr. Saeed has a small bakery in Matrah; he believes it is foolish to report financial information on a yearly basis. Instead, he thinks that financial information should be disclosed only when significant new information is available related to his business. Can Mr. Saeed ignore the daily transactions that may occur in his business? Explain the reason by justifying the result which relates to GAAP. (1 Mark)