AQ Pty Ltd, a Large Proprietary Company That Is a Reporting

question 7

Multiple Choice

AQ Pty Ltd, a large proprietary company that is a reporting entity, found that the carrying amount of its inventory exceeded its net realisable value, resulting in the recognition of a large expense during the 20X3 financial year.This inventory impairment expense was significantly more than for previous years.This expense should:

• A)be separately disclosed only in the profit or loss statement
• B)be separately disclosed either in the profit or loss statement or in the notes to the financial statements
• C)be separately disclosed in the notes to the financial statements
• D)not be separately disclosed because AQ Pty Ltd only has to comply with what are described in the textbook as the core accountings standards.

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Definitions:

Interosseous Membrane

A fibrous sheet connecting the bones of the forearm (ulna and radius) or the leg (tibia and fibula), providing stability and a surface for muscle attachment.

Ligament

Fibrous connective tissue that connects bones to other bones, providing joint stability.

Obturator Foramen

A large opening in the pelvis through which nerves and blood vessels pass, surrounded by the pubic and ischial bones.

Osteoporosis

A condition characterized by decreased bone density and increased fragility of bones, raising the risk of fractures.