Several independent situations are described below.

1. The owner of the business included his personal dental expenses in the entity’s income statement.

2. The company spent $40 000 on computer software development and recorded the cost as an asset. As yet it is impossible to predict whether this cost will result in future economic benefits.

3. Depreciation expense was not recorded because to do so would result in a loss for the period.

4. The cost of three books (cost $110 each) was charged to expense when purchased even though they had a useful life of several years.

5. A major lawsuit has been filed against the company for environmental damage, and the com¬pany’s solicitors believe there is a high probability of losing the suit. However, nothing is recorded in the accounts.

6. Land was reported at its estimated selling price, which is substantially higher than its cost. The increase in value was included on the income statement.

7. The company received a government grant of $60 000 to continue its research program into finding a cure for diabetes. The company recognised the grant as an addition to capital.

Required

Indicate for each situation the accounting principle(s) or reporting characteristics (if any) that are violated.