1. What is the revenue recognition principle? What is the expense recognition principle? In your opinion, why are these important to financial reporting.
2. What are the four different adjusting entries? What accounting assumptions necessitate the use of adjusting entries? What accounts are subject to adjusting journal entries? What are your thoughts on making adjusting entries; are they really needed or is this just extra work by accountants? What are the advantages and disadvantages of using automated accounting systems to do adjusting entries?
3. What are accruals? Provide examples of accruals. Why do accruals require adjusting entries? What are deferrals? What are some examples of deferrals?
4. Why do deferrals require adjusting entries?
5. When is the trial balance prepared? What is the purpose of preparing a trial balance? What does the trial balance tell you? What does the trial balance not tell you?