Accounting Case analysis

1.What is subscription accounting? What impact does it have on a firms cash flows?
2.Does Apple use subscription accounting for its iPhone? What about for its Mac computers? Why or why not?
3.Discuss GAAP, non-GAAP numbers and their impact on financial statements. Which method best reflects economic reality?
4.How would a change in the revenue recognition rule for smartphones affect Apple?

6a. A finance student says, Why pay any attention to accounting earnings numbers, given that a clean number like cash from operations is readily available? Why do you agree or not?

6b. A fund manager says, I refuse to buy companies that make voluntary accounting changes, since its certainly a case of managers trying to hide bad news. Why do you agree or not?