1. Explain with reasons, whether you think the idea that inventory should be included in accounts at the lower of cost or net realisable value is a useful one. Refer to at least two classes of users of financial accounting reports in your answer.
3. Peace Sdn Bhd is owned by Mr. Smile, a sole trader. Mr. Smile does not know how to journalize the following business transactions which occurred in May 2019:

(i)	May 1	Bought a motorbike on credit from Lakewood for RM5,500.
(ii)	May 3	A debt of RM3,470 owing from Richard was written off as a bad debt.
(iii)	May 8	Office chairs bought by us for RM6,000 were returned to the supplier- UL furniture as they were unsuitable. A full allowance will be given to us.
(iv)	May 12	We are owed RM300 by Dan. He is declared bankrupt and we received RM190 in full settlement of the debt.
(v)	May 14	We take goods costing RM600 out of the business inventory without paying for them.
(vi)	May 28	Some time ago we paid an insurance bill thinking that it was all in respect of the business. We now discover that RM400 of the amount paid was in fact insurance of our private house.
(vii)	May 28	Bought a trailer for RM17,000 on credit from C-Land Ltd.

Required:

Write-up the necessary journal entries to record the above transactions to inform Mr. Smile.

3. Discuss the importance of the conceptual framework in accounting and state FIVE

(5) of its components.