Give a short answer to the following questions.

$1.$ What is the major objective of financial reporting?

$2.$ Why do we need generally accepted accounting principles $($GAAP$)?$

Assumptions & Principles

For each of the following independent situations, state whether the following accounting practices are in accordance with or in violation of generally accepted accounting principles. Identify the accounting assumptions and principles followed $/$ violated in each situation.

$3.$ Stone Co$.$ purchased a piece of land several years ago for $$200,000.$ A similar piece of land close by recently sold for $$1,000,000.$ The Land account balance is not increased but remains at $$200,000.$

$4.$ Ann Boutique Ltd$.$ manufactures and sells high$-$fashion clothing to customers on credit. In preparing the financial statements for the company, the accountant showed all orders placed by customers as sales revenue before the firm ships out the product to its customers.