Response to the following questions:
1. What is a prepaid expense and where is it reported in the financial statements?
2. What type of assets require adjusting entries to record depreciation?
3. What contra account is used when recording and reporting the effects of depreciation? Why is it used?
4. Apple has unearned revenue. What is unearned revenue and where is it reported in financial statements?
5. What is an accrued revenue? Give an example.
6. A If a company initially records prepaid expenses with debits to expense accounts, what type of account is debited in the adjusting entries for those prepaid expenses?