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The company sold a piece of land in March 2020 to Sihle Mkhize at R1.2...

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Accounting

The company sold a piece of land in March 2020 to Sihle Mkhize at R1.2 million. The land was initially bought at R900000. The director requested the company to recognize any gain or loss from the sale of land to his personal account and the following journal entry was prepared. Debit Bank R1200000 Credit Amount owed to director R300000 Credit Land R90000. Explain if the scenario violates the qualitative characteristics, assumptions or principles under the conceptual framework. Your answer should be supported with correct journal entry as at 30 September 2020.

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