Question 1: Concepts and Principles (5 marks) John is an accountant for Sun Safe Ltd., he made the following accounting judgements: 1. There was a fire in one of the warehouses which destroyed a part of the inventory stock. John thinks it is not important to report this fire in the financial report because the loss is small. 2. The contract to deliver goods next month has been recorded as revenue in this month to boost this month profit. 3. An equipment originally costed $20,000 has been reassessed and recorded as $25,000 because John heard that the model is no longer in production, and he guessed that the equipment would worth more than it originally costs. 4. There are two potential suppliers for inventories. John had to calculate the supplier costs for each supplier. One of the suppliers is John's college classmates and John decided to give him favourable judgement so he can be chosen. 5. Over a conversation with a medical scientist, John came to know that one of the ingredients in a product of his company is determined to be a cause of cancer. John reported this to his CFO. After extensive research, they confirmed John's information. However, as the company is going to initial public offering (IPO), John and the CFO decided not to disclose this information for the fear of unsuccessful IPO. Required: Explain the impact of the above judgements on the qualities of relevance and faithful representation of financial reports, as specified in the Conceptual Framework. Start your answer here