EXERCISE 1.

1
1. Indicate which qualitative characteristics the accountant records operations (1),
(2), and (3) based on the Accounting theory framework.
a. (1) Lee sold a fixed asset and leased it back until the end of its useful life back
of assets. Therefore, the accountant recorded this as a liability.
=> Transaction (1) is recorded based on the "Faithful representation"
characteristic. Because this treatment matches what exists or has
happened, this information is completeness, neutral, and free from error
presented by Le company's accountants, ensuring that the information
provided is a relevant, faithful representation for the user.
b. (2) The company's assets are being evaluated according to the historical cost
model and the Income Statement Statistics show that some stores are operating
at a loss. However, the Assets in multiple stores are very likely to increase in
future value and income from reviews The increase in asset price is greater than
the loss in operating activities, so the accountant decides to move to a
reassessment model.
=> Transaction (2) is recorded based on the characteristic "Relevance".
Because the properties are in many doors the product is likely to increase
in value in the future and the income from increased asset appreciation is
greater operating loss, here we have the appearance of predicted value,
one of the components of the quality characteristic “Relevance”. From
there, expectations will form of users, helping users make appropriate
decisions.
c. (3) In 2019, Lee Company used the FIFO method to calculate inventory
prices. In 2020, accounting changed to the weighted average method. Therefore,
accounting decided to adjust the beginning balance of inventory according to the
weighted average method permission.
=> Transaction (3) is recorded based on the characteristic
"Comparability". When accounting changes the direction of the inventory
measurement method from FIFO to the weighted average method, the
accountant must adjust the beginning balance of inventory accordingly,
which can help businesses compare information on financial statements
 between periods to ensure information is clear, specific, and reasonable
for users.
2. Because many stores are operating at a loss, Lee doubts the company's
assumption of continuous operations as of December 31, 2020. Applying the
accounting theory model shows what the company accountant should do at the
time of preparing the financial statements for the accounting year ending on the
date December 31, 2020.
=> According to the accounting theory model, Lee Company's accountants
should conduct a reassessment of assets and property liabilities of the
business if the business does not meet the going concern assumption, and at
the same time, the company should also prepare the Financial Statements on
a different basis and explain clearly why it is applied. this facility. From
there, make sure to provide information to users in a relevant, faithful
representation.
EXERCISE 1. 2
(1) According to the conceptual framework, 1.8 billion VND is not recorded as a
decrease in receivables because Sunny is obliged to refund money for receivables
that Finease cannot collect after 6 months (Sunny still controls this asset so it
cannot be recorded as a decrease), must be recorded as a liability. Besides that,
Sunny will have to record 10 million VND in expenses. Next, Sunny will record
interest expense of 36 million VND (1.8 billion * 2%) as financial expenses,
because in September there are still no debt payments due or customers paying
debts. And record an increase of 36 million VND in liability for Finease.
(2) In this transaction, 10 billion VND cannot be recorded as sales revenue because
Sunny still has controlled the goods and has the right to buy back the goods at any
time within 2 years. Sunny still must pay storage costs. Therefore, this company
should consider 10 billion VND as a loan secured by inventory. And recorded 60
million VND as warehouse storage costs.
EXERCISE 1.6
• Historical cost = Purchase price – Depreciation = 100.000 – 40.000 = 60.000
(million dong)
• Value in use
 25.000 25.000
PV of CF for the next 2 years = 1 ,1 + 2
=43.388 , 43 (million dong)
1 ,1
20.000 20.000 20.000 20.000
PV of CF for the next 4 years = 1 ,1 + 2
+ 3
+ 4
=63.397 , 3
1 ,1 1,1 1, 1
63.397 , 3
Value in use = 43.388,43 + 2
=95.782 , 89 (million dong)
1,1
• Fair value = Selling price – Selling expense = 50.000 – 500 = 49.500 (million
dong)
• Current cost = The purchase price of equivalent assets - Accumulated
depreciation of equivalent assets = 110.000 - 40.000*110.000/100.000 = 66.000
(million dong)
EXERCISE 1.7

Financial capital maintenance

Physical capital
Constant purchasing maintenance
Monetary term
power term

Sales (31/12/x1) 2200 2200 2200

Cost of goods sold

2000 2000 2000
(1/1/x1)

Cost of goods sold 2100 2150

2000
(31/12/x1) (2000*105%) (50,75*200)

100 150
Change in equity 0
(2100-2000) (2150-2000)

200 100 50
Profit (31/12/x1)
(2200-2000) (2200-2000-100) (2200-2000-150)