Problem
A. Why does the time period in which revenue is recognized matter?
B. Why do companies make adjusting entries? Are there similarities and differences between assets and expenses?
C. Describe the type of transaction that gives rise to a deferred revenue journal entry during the year. Why might deferred revenues require adjustment?
Textbook: Financial accounting. Robert Kemp & Jeffrey Waybright. 5th edition. Read Chapter 3: Adjusting and Closing Entries.