• Do you think that the owner of the food stand in Manhattan, New York City use accrual accounting or the other type of accounting?And whatwill bethe other type of accounting?Explain.
• Why is the concept of liquidity so important? What would happen if a company is not liquid?Explain.
• The items in the balance sheet reflect both the previous balances and the current period transactions whereas, items in the income statement only result from the current period transactions. Why? Explain.