Which of the following is an example of applying professional judgement in accounting?

IMeasurement of inventory at the lower of cost and net realisable value.

IIEstimation of the expected useful life of an asset.

A.II only

B.I and II

C.I only

D.Neither I nor II is correct.

2.If there is no accounting standard that specifically applies to a transaction, the accountant:

A.should apply the principles in another Accounting Standard that deal with a similar transaction.

B.has complete discretion as to how to account for the transaction.

C.should not recognise the transaction because the correct accounting policy is too uncertain.

D.should apply the principles in the Conceptual Framework.