URGENT!

(b) For each of the following accounting practices, state the most appropriate accounting

concept or principle underlying the practice:

i. Poppy Shop Bhd values its entire inventory of finished goods using first-in-first-out

method.

ii. Queseira Bhd made payment for insurance premiums amounting to RM40,000.

However, the accountant of the company only recognized RM36,000 as insurance

expenses for the current year and the balance is recognised as the company's

asset.

iii. MFRS 111 prescribes that profit from long-term construction activity is recognised

based on stage of completion. Loss, on the other hand is recognized immediately.

iv. BaaBaa Bhd purchased a machine under a lease agreement and records it as its

asset even though the legal title to the machine remains with the seller. The entity

also shows the amount owing to the seller as its liability.

v. After a payment has been disbursed to a supplier, the accounts payable clerk is

required to file documents relevant to the payment made. This ensures that

transactions recorded are supported by proper source documents.