Financial statements must show a true and fair view of the financial performance and position of the business. If depreciation is not provided, both fixed asset and profit, will be shown at inflated amounts .

No, because unearned income represents the amount that has been received against which goods or services will be sold in the next year.

Under the accrual concept of accounting income is recognised when goods or services have been sold, whether the amount has been received or not. Since it is income, it is credited to, the profit and loss amount. And since the amount is due to the enterprise, it is shown as a current asset in the balance sheet.

(i) Debts which cannot be recovered or become irrecoverable are called Bad debts.
(ii) It is a loss for the business and should be adjusted against profit.

(i) The decrease in value of fixed assets due to usage or passage of time is called depreciation.
(ii) It is a loss to the business.

(i) The income which has been earned during the current accounting year but not received till the end of that accounting year is called as accrued income.
(ii) It generally happens in case of amount to be received on account of commission, interest, dividend, etc

(i) Prepaid expenses refer to amount paid in the current accounting year for the benefit or services to be received in the next accounting year.
(ii) They are also called as unexpired expenses. Prepaid expense account is a representative personal account.

(i) Expenses like wages, salaries, rent, etc. which have been incurred in the accounting period but not paid at the end of the accounting year are called outstanding expenses.
(ii) Outstanding expense account is a representative personal account.