Question Two (10 marks) Mr. Tom, the owner of a small business selling and repairing cars which you patronize, has just received a copy of his accounts for the current year. He is rather baffled by some of the items and he has asked you to explain certain points of difficulty to him. This you have readily agreed to do. His questions are as follows: (a) (b) (c) (d) 'What is meant by the term "asset"? My 20-year mechanical experience and skill is an asset to the business but it does not seem to have been included in the financial statement.' The house I live in cost RM130000 five years ago and is now worth RM360000, but that is not included in the financial statements either.' 'Why do amounts for "vehicles" appear under both non-current asset and current asset headings?' 'Why is the "bank and cash" figure in the statement of financial position different from net profit for the year shown in the income statement?" Required: Answer each of his questions in terms which he will be able to understand (You should include accounting concept in your explanation.