Question 1: Betsy McCall is the president of Brew News. She has no accounting background. McCall cannot understand why Current cost is not used as the basis for accounting measurement and reporting. Explain what basis is used and
Why?
Question 2: Describe the two constraints inherent in the presentation of accounting information.
Question 3: In February 2008, Matt Osterhaus invested an additional $5,000 in his business, Osterhaus Pharmacy, which is organized as a corporation. Osterhaus' accountant, Kate Mulgrew, recorded this receipt as an increase in cash and revenues. Is this treatment appropriate? Why or why not?