Question: Michael McNamee is the proprietor of a property management company

Michael McNamee is the proprietor of a property management company, Apartment Exchange, near the campus of Pensacola State College. The business has cash of $ 8,000 and furniture that cost $ 9,000 and has a market value of $ 13,000. The business debts include accounts payable of $ 6,000. Michael’s personal home is valued at $ 400,000 and his personal bank account has a balance of $ 1,200. Consider the accounting principles and assumptions discussed in the chapter and identify the principle or assumption that best matches the situation:
a. Michael’s personal assets are not recorded on the Apartment Exchange’s balance sheet.
b. The Apartment Exchange records furniture at its cost of $ 9,000, not its market value of $ 13,000.
c. The Apartment Exchange reports its financial statements in U. S. dollars.
d. Michael expects the Apartment Exchange to remain in operations for the ­foreseeable future.

View Solution:

Sale on SolutionInn
  • CreatedJanuary 16, 2015
  • Files Included
Post your question