Discuss the principles and practices which should be used in the financial year to 30 Nove

Discuss the principles and practices which should be used in the financial year to 30 November 2008 to account

for:(c) the purchase of handsets and the recognition of revenue from customers and dealers. (8 marks)

Appropriateness and quality of discussion. (2 marks)

Handsets and revenue recognitionThe inventory of handsets should be measured at the lower of cost and net realisable value (IAS2, ‘Inventories’, para 9). Johanshould recognise a provision at the point of purchase for the handsets to be sold at a loss. The