You are employed as a graduate accountant in a mid-tier accounting firm Max and Lachy Accounting Solutions. One of the managing partners at the firm has asked you to review the following cases where the client has violated at least one of the accounting assumptions, concepts and/or definitions you studied in Accounting for Business at university.

Case 1: Andrew purchased a sports car by using the business bank account. He always wanted this car since he was a teenager. The car has no business use, but he uses it to commute to the restaurant. He has recorded this car as a business asset.

Case 2: At the end of the current year, Andrew purchased a pizza oven for $11,000. Though the oven is yet to be used, Andrew has written off the entire amount as an expense for the year. Prior to the purchase, Andrews business has total assets of $180,000.

Required

identify which accounting concept or assumption has been violated in each case, and;

what the correct accounting treatment(s) should be in each case.