Identify the accounting concepts or principles that relate to each of the following sentences, and explain what effect the concepts or principles have on financial statements:

1. Users of financial statements should be able to believe that the numbers represent real events.

2. Financial statements should avoid undue optimism about the future.

3. It is hard to say absolutely if a company is performing well or badly, but you can evaluate its relative performance.

4. Financial accounting should be helpful both in understanding the past and looking ahead to the future.