1. GAAP is based on a concept of accrual accounting. Define/describe accrual accounting, the two fundamental principles guiding this approach, and why this is the preferred method.
2. The balance sheet consists of assets, liabilities, and equity. The first two are even further broken down into current assets/liabilities and long-term assets/liabilities. Define each category, clarify the difference between current and long-term accounts, and provide two examples of accounts reported within each of the following categories: