For each situation, list the assumption, principle, or constraint that has been violated, if any.
A) East Lake Company recognizes revenue at the end of the production cycle but before sale. The price of the product, as well as the amount that can be sold, is not certain.
B) Hilo Company is in its fifth year of operation and has yet to issue financial statements.
C) Gomez, Inc. is carrying inventory at its original cost of $100,000. Inventory has a fair value of $110,000.
D) Bly Hospital Supply Corporation reports only current assets and current liabilities on its balance sheet. Equipment and bonds payable are reported as current assets and current liabilities, respectively. Liquidation of the company is unlikely debited the "Computers" account.
E) Chieu Company has inventory on hand that cost $400,000. Chieu reports inventory on its balance sheet at its current fair value of $425,000.
F) Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds debited the "Computers" account.
A. Going concern assumption
B. Periodically Assumption
C. Historial Cost Principle
D. Revenue Recognition Principle
E. Economic Entity Assumption
F. No Violation

Revenue Recognition Principle: Before the sale but at the conclusion of the production cycle, East Lake Company records revenue. It is uncertain what the product will cost and how much can be sold.
Periodically Assumption: Despite being in its fifth year of operation, Hilo Company has not yet released financial results.
No Violation: Gomez, Inc. is holding goods at its $100,000 original cost. The fair value of the inventory is $110,000.
Going concern assumption: On its balance statement, Bly Hospital Supply Corporation only lists current assets and current liabilities. Current assets and current liabilities are the amounts that are stated for equipment and bonds payable, respectively. It's doubtful that the "Computers" account would be debited during firm liquidation.
Historial Cost Principle: Bly Hospital Supply Corporation only lists current assets and current liabilities on its balance sheet. The quantities for equipment and bonds payable are indicated as current assets and current liabilities, respectively. The "Computers" account would probably not be debited during corporate dissolution.
Economic Entity Assumption: Toxy Syles, president of Classic Music Company, bought a computer for her personal use. She paid for the computer by using company funds and debited from the "Computers" account.

What is the Going concern assumption?

According to the going concern principle, any organization's operations will continue for the foreseeable future. According to the guiding principle, every choice made by a company should be made with its continued operation in mind rather than its eventual closure.

Thus, the mention above correctly matched the assumption, and principle.

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