For each of the following, identify the primary GAAP that has been violated and explain why. 1.

Question:

For each of the following, identify the primary GAAP that has been violated and explain why.

1. Delta Company prepared its first set of financial statements for the three years ended July 31, 2020.

2. Allard Consulting purchased $9,800 of supplies on September 30, 2020, and debited Office Supplies Expense. Allard’s year-end is September 30.

3. On May 3, 2020, Nikos Car Wash collected $3,000 in advance from a new limousine company to begin operating June 1, 2020. Nikos credited a revenue account for the $3,000.

4. On November 20, 2020, Scooter Town rented equipment for $1,500. Scooter Town is not recording the transaction until it pays (payment is required 15 days from the rental date).

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...

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