In the Absence of an Australian Accounting Standard Specifically Applying

question 33

True/False

In the absence of an Australian accounting standard specifically applying to a transaction,accounting policies must be selected on the basis that they provide relevant and reliable information to users of the financial report.

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Definitions:

Capital Assets

Long-term assets acquired for operation and not for resale, typically including buildings, machinery, and equipment.

Direct Method

A method of allocating service department costs directly to producing departments without considering interactions among service departments.

Operating Activities

Activities that constitute the primary or main activities of an organization, including sales, supply, and production functions, often reflected in the cash flow statement.

Indirect Method

A technique used in comprehensive cash flow statements, it adjusts net income for non-cash transactions and changes in working capital to calculate net cash from operating activities.