Part A: Shorts answers

1. Please explain the roles of financial statement in business.
2. Please explain the differences between liabilities and cash and their similarities.
3. Please explain why governments tax officials need to read and understand the financial statements of firms.
4. Please discuss three types of depreciation methods Please explain the differences of cash-based accounting system from an accrual-based accounting system.
5. Explain the aim of having a method in recording the inventory for a retailing firm. Explain the difference between LIFO and Meiwg average method.

Part B: Please prepare journal entries for the following transactions:

1. The owner invested $ 2000 in cash and $20,000 in a car (1 April 3023).
2. A company paid $1200 for electricity expense (4 April 2023).
3. Received $4000 cash from the payment of an account receivable from a customer (6 April 2023).
4. Paid insurance cost for April $120 (17 April 2023)
5. Purchased inventory in credit from a supplier $3000(25 April 2023).