Gordon is the majority owner of Gordon House Restaurant (GHR), a publicly traded chain of family restaurants. The company is owned by hundreds of shareholders who expect timely, reliable and accurate financial statements. GHR produces financial statements periodically. It is now June 15, 2016. The accountant has prepared the financial statements for the eight-month period ended May 31, 2016. The previous financial statements covered a one-year period.GHR was recently sued by another company, the details of which are not disclosed in the financial statements. The court proceedings have not yet ended. However, as of May 31, 2016, itwas believed that GHR is very likely to lose the case and eventually pay a significant amount in damages to the plaintiff.Also consider the following additional information:•Cash disbursements are not supported by additional source documents•GHR has recognized revenue in a different accounting period than the costs associated with producing that revenue required138

The Accounting FrameworkChapter 

3 a) Which of the four qualitative characteristics of financial information has GHR failed to apply? 

b) Which of the basic concepts and principles of accounting has GHR violated? Explain
 

Answer rating: 100% (QA)

a Conceptual framework of financial statement reporting gives a details about the concept which guide the preparation of financial statement especiall... View the full answer