$1)$ The income statement is an important financial statement used by individuals who are interested in the operation of a business enterprise. Explain how the period assumption and the revenue recognition and expense recognition principles provide guidance to accountants in preparing an income statement? $2)$ In developing an accounting information system, it is important to establish procedures whereby all transactions that affect the component of the accounting equation are recorded. Why then, is it often necessary to adjust the accounts before financial statements are prepared even in properly designed accounting system? Identify the major types of adjustments that are frequently made and give a specific example of each. $3)$ You are visiting with a friend, Jum Broke, who want to start a new business. During discussions on forming the business, Jim made his statement: Our business will have accounts receivable and accounts payable. It will also acquire substantial amount of computers and equipment. Will be acceptable to use cash basis accounting. Prepare a response for Jim. $4)$ Jat Farr Company is a manufacturing company that specialize in writing instruments. The past year was a difficult one for the company, as it sought to retain its share in a market in which the largest competitors were also rapid innovators.