Chapter 2, Problem 6CA

To determine

Conceptual framework: The theoretical structure which is created to support the real time situation in a standardized manner is termed as conceptual framework. In other terms, conceptual framework is logical presentation of interrelated objectives and the fundamentals that can lead to a standard procedure. The conceptual framework for financial accounting provides the nature, limitation and functions of the financial accounting.

(a)

To identify: To identify the rational for identifying cost as expense at the time of sale of a product.

To determine

(b)

To determine rationale for identifying cost as expense rather than cost as asset.

To determine

(c)

To determine rationale to find when a cost can be treated as asset.

To determine

(d)

To determine the systematic and rationale behind the allocation of expense.

To determine

(e)

To determine the rationale to consider a cost as a loss.