Pick 2 of the 4 accounting facts below that violate GAAP standards and explain in good detail why they violate GAAP and how you might go about fixing the issue.

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You know that one of the Big Four CPA firms is scheduled to audit Ling Clothing soon, and you have noticed that some of your companys transactions and events are recorded in a way that may violate accepted accounting theory and Generally Accepted Accounting Principles (GAAP) you learned in school. Some of the Ling Clothing accounting facts that give you pause are:

1) Since things were pretty hectic at yearend, the accountant made no effort to reconcile the bank account. His reason was that the bank probably had not made any errors. The bank balance was lower than the book balance, so the accountant debited Miscellaneous Expense and credited Cash for the difference.

2) When a customer failed to pay the amount due, the accountant debited Allowance for Uncollectible Accounts and credited Accounts Receivable. The amount of accounts written off in this manner was huge.

3) The company counted some items twice in taking the physical inventory at the end of the year. The person taking the inventory said he had forgotten to include some items in last year's physical inventory, and counting some items twice would make up for the items missed last year so that net income this year would be about correct.

4) An old truck was traded for a new truck. Since the tradein value of the old truck was higher than its book value, a gain was recorded on the transaction.