Question $1$

a$)$ Cash$-$basis or accrual$-$basis accounting are the most common basis for accounting. Discuss the key difference between the two approaches.

b$)$ For accounting statements to represent the various value of assets and liabilities, it is necessary for a measurement unit to established. Briefly discuss the following measurement principles

i$)$ Cost principle

ii$)$ Monetary unit assumption

iii$)$ Economic entity assumption

c$)$ What is the accounting equation?

Analyse the effects of the followings transactions on the accounting equation.

i$)$ Purchases $$1,000$ goods on credit

ii$)$ Receives cash $$20,000$ from sales

iii$)$ Obtains $$3,000$ bank loan