QUESTION TWO

1. Use ONE MAIN accounting concept from the framework of accounting to provide acceptable solutions to the following accounting problems

1. The accountant is not sure as to whether to include cash received from a transaction in the income statement or the cash book

2. The managers wish to assess the effectiveness of its standard costing system

3. The directors are doubting the professional acumen of the staff in the valuation department of the firm

4. It is not clear whether to include some assets in the income statement or the statement of financial position

5. The accountant of a cash-based business wishes to save on cost by relying solely on the cash book and ignoring other ledger accounts [10 Marks]

2. Accounting is increasingly becoming irrelevant in modern business practice and business schools should shift focus to other more useful areas of management processes. Do you agree with this sentiment? Elaborate [4 Marks]

c) Evaluate the accounting standard setting process used by the International Accounting Standards Board [6 Marks]