1. Examine the advantages and disadvantages of cash flow accounting. 

2. (a) Outline the legal and professional requirements governing the realization of profits; and (b) Explain what an accountant means by the term ‘realization’. 

3. Assume that the practice adopted by the previous accountant of J&J Limited was not in conflict with best accounting practices: (a) Advise Joseph Agana how it might be possible to include some profit in the profit and loss account for a contract that has not yet been completed; and (b) State what action you would take if previous estimates about profitability appeared somewhat over-simplistic.

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