a) which concept or assumption has been violated, and;
b) what the correct treatment should be.
1. Carmel's business has $35,000 of outstanding debtors on its books, and she is quite certain that $4,000 of this debt will prove impossible to collect. Carmel has instructed the accountant at your firm to make no adjustments to the ledger and the reports since "they're still our debts and therefore still assets of this business."
2. Matthew, the proprietor of a retail bookshop has taken four books from the business to give to friends as birthday presents. He recorded this as an expense in the bookshops accounting records.