1. Explain why adjusting entries are needed, and identify two key things that should be kept in mind when preparing them.

2. Explain why closing entries are made. What are the two objectives that are accomplished by making closing entries?

3.In general terms, explain the purpose of the statement of income and the statement of financial position. Outline the type of information that each statement presents, and explain the basic difference between the types of items that appear on the statement of income and those that appear on the statement of financial position.