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  3. in the following scenarios, have any accounting pr

In the following scenarios, have any accounting principles or assumptions been violated? If yes, which...

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Accounting

In the following scenarios, have any accounting principles or assumptions been violated? If yes, which one and how? If no, why?

(d) Likole Nikalu Enterprise entered into an agreement with its suppliers to supply goods at Sh.290 per unit. In October 2019, the purchasing manager was able to negotiate a special price and acquired 10,000 units at Sh.250 per unit. The difference between the agreed price of Sh.290 per unit and the purchase price of Sh. 250 per unit had been recognised as revenue.

(e) In an attempt to report a desired amount of operating profit, depreciation for the year on a secondhand truck purchased on January 2, 2019 for Sh.1,800,000 was provided at Sh.100,000. The truck had an estimated residual value of Sh.200,000 and a useful life of 4 years.

(f) Leasehold improvements with an estimated useful life of eight years were completed early in the year 2019 at a cost of Sh.9,000,000. The company had a five-year non-renewable lease on the property to which the improvements were made. The company decided to amortise the lease improvements over eight years.

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