Select three of the six questions listed below to ask your new bookkeeper, and describe the response you expect to hear:
- Define the accounting cycle.
- Explain the revenue principle and its implication on the financial statements.
- Define the matching principle and why it is critical in the preparation of the accrual-based financial statements.
- Compare and contrast a prepaid account and a deferred account. Give an example of each and how each affects the financial statements.
- Define and differentiate between the purpose of a journal entry, an adjusting entry, and a closing entry.
- Define the difference between a trial balance and a post-closing trial balance.