For each of the independent situations described below, match the accounting principle or concept that has been violated.

 

(i)           Top One Company signed a two-year contract with Leading Company which called for Leading Company to purchase not less than $1,000,000 worth of goods from Top One Company in each year. The value of the contract, $2,000,000, was recorded as sales revenue in the books of Top One Company in the year the contract was signed.

 

(ii)         At the end of the financial year, the closing stock of Hung Tai Limited Company, which cost $51,000, had a market value of $70,000. The accountant of Hung Tai Limited Company recorded the $70,000 in the books so as to reflect the real value of the stock.

 

(iii)        The owner of Gorock Company bought a laptop computer and placed it in his office. He used this computer for his personal securities trading on the Internet and setting his work schedules. The accountant included this laptop computer in the figure for office equipment and provided it with a 10% p.a. depreciation.

 

(iv)       The net profit of Riverside Company dropped significantly this year. In order to present a strong financial position to potential investors, the owners decided to change the depreciation method for all fixed assets so that the total expenses decrease and net profit increases.

 

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