Far East Specialties is an import company, financed primarily by stockholders and bank loans. It imports handmade goods from Central and East Asia to the United States, where they are sold to retail stores. The company's buyers contract with small companies for goods, which the buyers ship to a central location in the United States. The goods are inventoried and then redistributed as orders are received from retailers. The company receives a bill from the manufacturers along with the goods it receives. Payment is made each month. Bills are sent to retailers along with orders. Most retailers pay their bills each month, as well. It can be several months from the time goods are shipped to the United States until cash is received from retailers.

Required
A. Explain how the various aspects of Far East Specialties' transformation process are reported in its financial statements. That is, consider the events just described and identify where information about each event is reported in the financial statements. In particular, consider the relationship the company has with its investors, suppliers, and customers.
B. Why is it important that time, and the timing of events, be considered in reporting accounting information?