The following are unrelated accounting practices:

1. Pine Company purchased a new \(\$ 30\) snow shovel that is expected to last six years. The shovel is used to clear the firm's front steps during the winter months. The shovel's cost is recorded on the company's balance sheet as an asset.

2. Penny Corporation has been named as the defendant in a \(\$ 50\) million pollution lawsuit. Because the lawsuit will take several years to resolve and the outcome is uncertain, Penny's management decides not to mention the lawsuit in the current year financial statements.

Required For each of the given practices, indicate which accounting concepts, principles, or constraints apply and whether they have been applied appropriately. For each inappropriate accounting practice, indicate the proper accounting procedure.