The company, Discover, Embrace & Fulfill Scenic Tours offers road journeys to tourist sites in Melbourne and Victorian Provincial towns.
The company has a fleet of luxury bus coaches. The major shareholder and executive director Mr Edward Alexander has a passion for vintage (old classic) cars. On rare occasions, he collects important clients from their hotel to the departure lounge of his business. He uses his private 1958 Rolls Royce, registration EA-001 motor vehicle.
Mr Edward Alexander believes he should list the 1958 Rolls Royce, EA-001 as a non-current asset in the Statement of Financial Position of Discover, Embrace & Fulfill Scenic Tours.
Is there a breach of an accounting principle and if so what accounting principle?
Group of answer choices
Yes, Going Concern Principle
Yes, Accounting Entity Principle
No, no breach of the Accounting Entity Principle
No, no breach of the Going Concern Principle
Yes, Historical Cost
No, no breach of the Accounting Entity Principle
The Accounting Entity Principle states that a business and its owners should be treated as separate entities for accounting purposes. In this case, Mr. Edward Alexander's 1958 Rolls Royce, EA-001, is a personal asset used occasionally for the company's operations. It is not owned by the company, Discover, Embrace & Fulfill Scenic Tours, but rather by Mr. Alexander personally. Therefore, listing the vintage car as a non-current asset in the company's financial statements would
