Contrast a prepaid account and a deferred account

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Reference no: EM13972462

For this discussion, assume the role of a financial manager in a company, and assume that you have just hired a new bookkeeper to join your team. You want to assess the new hire's understanding of the accounting processes as a whole, so you decide to ask a series of questions. 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.

Reference no: EM13972462

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