Please write minimum 150 words to each question.

1. What does it mean to say that accounting is a transformative process?

2. What makes an asset a current asset as opposed to a long-term asset? Why is this classification useful?

3. Some events that occur within a business do not have an impact on any of the elements of the balance sheet. Why?

4. What are the two main sources of equity reported on a balance sheet and how do they differ?

5. Explain how both liabilities and equities can be thought of as claims against assets.

6. When is revenue earned and therefore should be recognized?

7. When a company pays $10,000 for insurance that will cover it for two years, the transaction is not immediately recognized as an expense. Explain why.

8. Distinguish between cash flows resulting from operating activities, financing activities, and investing activities.