You have recently drafted the annual accounts of a small manufacturing company. The owner of the business is puzzled by certain of the items in the accounts and has written to you asking for an explanation of the following points: 7. We are buying all of our vehicles on hire purchase, so they really belong to the finance company. Why do you show them as the company's assets? 8. We have almost completed work on a large batch of 'dodgy' brackets that will earn us nearly 900,000. Why has no account been taken of this in the income statement? Explain how you would respond to each of the above queries. Where relevant state: (i) Definition of the element in the conceptual framework that you are considering How the item relates to the definition (iii) How the items concerned should be treated