1. Define net income and its two major components, revenues and expenses.
2. Explain the difficulties of income measurement caused by the accounting period issue, the continuity issue, and the matching issue.
3. Define accrual accounting and explain two broad ways of accomplishing it.
4. State four principal situations that require adjusting entries.
5. Prepare typical adjusting entries.
6. Prepare financial statements from an adjusted trial balance.
7. Analyze cash flows from accrual-based information.