REQUIRED All questions should be answered from the perspective of Top Ltd. The word lengths are a suggestion only, i.e., they are NOT strict word limits for each part. 1) What is the main accounting...

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REQUIRED

All questions should be answered from the perspective of Top Ltd.

The word lengths are a suggestion only, i.e., they are NOT strict word limits for each part.

1) What is the main accounting policy issue(s) that must be resolved in relation the transaction described in the case? (approximately 15 – 40 words) (1.5 marks)

2) Identify one principle that is relevant to the accounting policy issue(s) that you identified in part (1) by providing a reference for that principle (e.g., AASB XXX, para. zz; orConceptual Framework, Chapter X, para. x.xx) AND explain why you chose that principle. (approximately 15 – 40 words) (1.5 marks)

3) Identify another principle that is relevant to the accounting policy issue(s) that you identified in part (1) by providing a reference for that principle. e.g., AASB XXX, para. zz; orConceptual Framework, Chapter X, para. x.xx (1 mark)

4) Describe an accounting policy to account for the transaction with Roof Specialists Pty Ltd’s, including the subsequent accounting treatment of any asset affected by the transaction.Do not justify your policy. Just describe it XXXXXXXXXXwords)(3 marks)

5) Prepare a journal entry to record the invoice on 30 June 2022 to illustrate the application of your policy at (4). (1 mark)

Answered Same DayApr 12, 2022

Solution

Himanshu answered on Apr 12 2022
13 Votes
1.
Historical Cost Principle
In accordance with the Historical Expenditure Framework, an asset is usually recorded in the financial records at the price paid for its acquisition at the time of purchase, and the cost becomes the basis of accounts for the entire acquisition period and future accounting periods.
2.
Aleksandra B. Zimmerman; Robert Bloom, Accounting Historians Journal (2016) 43 (1): 79–119 (Bloom, 2016)
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