E$1\mathrm{.}4($LO $2)$ The following situations involve accounting principles and assumptions.

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Julia A$/$S owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Julia reports the buildings at their current value in its accounting reports.

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Dekalb Creations includes in its accounting records only transaction data that can be expressed in terms of money.

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Omar Shariff, owner of Omar$$s Oasis, records his personal living costs as expenses of the business.

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Instructions

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For each of the three situations, determine if the accounting method used is correct or incorrect. If correct, identify which principle or assumption supports the method used. If incorrect, identify which principle or assumption has been violated.

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Classify accounts as assets, liabilities, and equity.