. Review questions 12.1 1 Explain how the Going concern and Period assumptions affect the calculation of profit. 2 Define the following terms: revenue expense 3 Explain how profit is calculated under the Accrual basis assumption. 4 Explain why profit may be inaccurate if balance day adjustments are not recorded 5 Explain the purpose of a balance day adjustment. 6 Explain how balance day adjustments ensure Relevance in the Accounting reports 7 List: five balance day adjustments that relate to expenses three balance day adjustments that relate to revenues