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QUESTIONS 1 Identify which assumption, characteristic, concept or principle best describes the following: (a) Qualified accountants audit the financial statements of ABC Bhd. (b) CDE Bhd has been using the the first-in-first-out (FIFO) basis to value its finished inventory since it began operation. ends five-year period during which the machine is used by the company to (c) LMN Bhd issues its quarterly reports immediately after each quarter (d) JKL Sdn Bhd recognises depreciation expense for a machine over the earn revenue. (e) PQR Entity reports revenue when it is earned instead of when the (D) The economic activities of XYZ are divided into 12-month periods for (g) FGH Sdn Bhd expenses the cost of wastepaper baskets in the year (h) MNO Entity depreciates all buildings using the straight-line method. cash is received. the purpose of issuing annual reports they are acquired. (i) RST Entity provides for doubtful debts annually. Regulatory and Conce (j) UVW Entity recognises in the statement of financial position as non- current assets all the assets that it leases under finance lease even though it has no legal title to the assets. (k) ACE Entity writes down its stock of finished goods to the estimated selling price when the selling prices of the goods fall below the cost. Encik Samad ensures that personal and business record keepings are kept separate. (m)LLL Sdn Bhd writes off as expenses in the year that it buys office equipment that have a life of more than one year but which cost less than RM1,000. However, all other office equipment is capitalised and depreciated over their economic useful lives. (n) NNN Sdn Bhd sells a plant to Lease Bhd and immediately leases it back for the remaining life of the asset. NNN Sdn Bhd still has the asset in its accounts. entify the assumption, concept, principle or characteristic that is best

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