Answer
(a) The Generally Accepted Accounting Principles (GAPP), that relate to adjusting the accounts are as under:
i) Accrual Versus cash basis of accounting
ii) Matching Principle
Work Step by Step
i) Accrual basis of accounting means that transaction are recorded in the periods in which the event occurs, even if cash is exchanged before or after that period.
ii) Let the expenses follow the revenues in the period when efforts are expended generate revenues.
