Answer this question:-

1. What is meant by GAAP? What is the main goal of GAAP?

2. How does GAAP define historical cost? What are two advantages to basing the valuation of assets and liabilities on their historical cost?

3. What is meant by accrual basis of accounting? Provide the two major recognition principles of accrual basis of accounting.

4. Explain the nature and purpose of adjusting entries and closing entries?

5. Disclosure notes are an integral part of the information provided in financial statements. In what ways are the notes critical to understanding the financial statements and to evaluate the firms performance and financial health?