Appendix C: Owner's Questions The following questions were raised by Mr. Burns during the initial client meeting. Please draft a response and include it in your memo with the financial statements. 1. In managing the day-to-day operations of the water park, I focus on cash flow management as my priority and admit to having very little knowledge of financial accounting. Explain to me the objectives of the accrual basis of accounting and the purpose of adjusting entries. (4 marks) 2. I understand why the bank wants to view our statements before approving the expansion loan; however, why do they want the statements audited? Would there be others that want to review our audited financial statements? Why? (6 marks) 3. Our family is talking about opening a second water park in another city and allowing the younger generation to run it. Typhoon Lagoon would supply a start-up loan, but all other decisions would be made by my younger descendants. What forms of business organization are available to them and what are the pros and cons of each? Which would you recommend? (6 marks) 4. Before he took his medical leave, my brother was talking to me and my assistant about how we need to continue to follow Accounting Standards for Private Enterprises. Are there other bodies of accounting standards used in Canada, and what is the main difference? (4 marks) 5. My brother was also talking about financial statements and financial statement elements. Can you explain what these elements are and why they are important? (12 marks)