) The accountant of Lisbon is considering a number of transactions and events and how they should be treated in accordance with the concepts and qualitative characteristics of financial information as set out in the Conceptual Framework. During the year ended 31 March 2020 Lisbon experienced the following transactions or events: (i) The company's statement of profit or loss, prepared using historical costs, showed a loss from operating its shops, but Lisbon is aware that the increase in the value of its properties during the period far outweigh the operating loss. (ii) Inventory has up to this year been valued using FIFO but the accountant is considering changing to the weighted average method for the year to 31 March 2020. 1. The accountant is aware that some members of the board of Lisbon have little understanding of accounting and he is worried about his presentation of the financial statements at the board meeting. In accordance with the Conceptual Framework, how should the accountant deal with this situation? A In doing his presentation he should omit any complex issues, so that everybody can understand what he is saying B He should open his presentation with the advice that some of them may not understand all of it C He should classify, characterise and present the information clearly and precisely D He should deliver his presentation just to those who are financially qualified 2. In looking at issue (i) above, the accountant decides that the properties should be revalued. Which concept or qualitative characteristic has been applied in making this decision? A Materiality B Going concern C Relevance D Timeliness 3. The conceptual Framework identifies an underlying assumption in preparing financial statements. This is: A Going Concern B Materiality C Substance over form D Accruals 4 4. Because of the loss arising from operating the shops, the accountant is considering whether Lisbon is a going concern. If it was decided that Lisbon was no longer a going concern at 31 March 2020, which of the following is correct in accordance with the Conceptual Framework? A Financial statements do not need to be prepared B All the assets should be liquidated C The financial statements should be prepared on a different basis D The financial statements should be prepared as normal and the going concern status disclosed in the notes 5. In applying the enhancing qualitative characteristic of comparability, how should the change of inventory valuation basis be accounted for? A The change should be disclosed only B The financial statements for 31 March 2020 should show both methods C The notes should show what the profit would have been if the change had not taken place D The financial statements for the prior period as shown at 31 March should be restated using the weighted average basis