1. Which of the following statements about the application of IFRS in accordance with The Conceptual Framework is the most corre
2. 1. Entities that are not expected to continue in the foreseeable future are to prepare their accounts on the net realisable value assumption.
   2. Entities may change the valuation and measurement of assets provided they disclose the change and its effects in the financial report.
   3. Entities within the scope of the Corporations Act can choose to apply Australian or International accounting standards when preparing their financial reports.
   4. Entities may prepare financial statements on a cash flow basis provided that they meet the characteristics of comparability, understandability, timeliness and verifiability.
3. Which of the following statements about a departure from IFRS is correct? A. Departure is never permitted.
   2. Departure is permitted when the financial statement would be unfairly presented because of compliance with IFRS.
   3. Departure is permitted when management and the external auditor agree on the departure.
   4. Departure is permitted when the disclosure of the adopted accounting policy is detailed in the notes.
4. The accountant of Scrub and Shine Ltd identified an aggregate charge of $500 000 (comprising 126 various supplier invoices) of advertising expense for a new microfibre cloth within the entitys financial records. Should the accountant present this item separately in the financial statements?
   1. Yes, the aggregate value of this advertising expenditure is material.
   2. Yes, details of all transactions should be disclosed to assist users make fully informed decisions.
   3. Possibly. This would depend on the size and nature of the advertising expenditure relative to other items disclosed in the financial report.
   4. No, the individual values of the invoices comprising this amount are immaterial. The disclosure requirements do not apply to immaterial items.