Rosman Co. had three major business transactions during 2017.
(a) Reported at its fair value of £260,000 merchandise inventory with a cost of £208,000.
(b) The president of Rosman Co., Jay Rosman, purchased a truck for personal use and charged it to the company's Salaries and Wages Expense account.
(c) Rosman Co. wanted to make its 2017 income look better, so it added 2 more weeks to its fiscal year (a 54-week year). Previous fiscal years were 52 weeks.
Instructions
In each situation, identify the assumption or principle that has been violated, if any, and discuss what the company should have done.