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02/09/2020 Client: murali Deadline: 3 days

Discussion  1


Every time a company prepares financial statements, adjusting entries are required. Generally, financial statements are prepared at the end of each month, the end of each quarter and at the end of each year.


Each adjusting entry affects a balance sheet account and an income statement account. For example, Adjusting Entries for Prepaid Assets or Fixed Assets involve decreasing the asset account and increasing the expense account. Adjusting entries are made in order properly follow GAAP.  



  1. Based on your review of Chapter 3, describe an adjusting journal entry that is needed at the end of an accounting period.

  2. Why are adjusting entries important and how do they contribute to accurate financial reporting?

  3. Accrual accounting is required under U.S. GAAP. One of the main principles of accrual accounting is the Matching Principle, also known as the Revenue Recognition Principle and the Expense Recognition Principle. Consult are liable resource online and in your own words, explain the difference between accrual basis accounting and cash basis accounting. How does this relate to the Matching Principle?




Discussion 2


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