Response to the following :
1. Suppose you have saved some money and you are considering an investment in Amazon.com. What accounting information will you use to decide whether or not to invest in Amazon? Which accounting principle do you hope Amazon's accountants follow closely? Explain your answer.
2. Shelly Herzog publishes a travel magazine. In need of cash, she asks Central Bank for a loan. The bank requires borrowers to submit financial statements to show results of operations and financial position. With little knowledge of accounting, Herzog doesn't know how to proceed. Explain to her the information provided by the balance sheet and the income statement. Indicate why a lender would require this information.