Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

Financial Accounting

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

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Multiple Choice

Analyzing a business problem typically involves which of the following steps?

Identifying relevant accounts, determining necessary adjustments, and recording adjusting journal entries

Only preparing financial statements without reviewing account balances

Ignoring prepaid expenses until the end of the fiscal year

Recording all transactions as cash receipts and disbursements only

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Verified step by step guidance

Step 1: Understand the purpose of analyzing a business problem, which is to ensure accurate financial reporting and compliance with accounting principles.

Step 2: Identify relevant accounts that are impacted by the business problem. For example, accounts such as prepaid expenses, accrued liabilities, or revenue accounts may need attention.

Step 3: Determine necessary adjustments by reviewing account balances and identifying discrepancies or unrecorded transactions. This may involve calculating adjustments for prepaid expenses, accrued revenues, or depreciation.

Step 4: Record adjusting journal entries to reflect the necessary changes in the accounts. Use the double-entry accounting system to ensure debits and credits are balanced.

Step 5: Prepare financial statements after adjustments are made, ensuring that the statements accurately reflect the financial position and performance of the business.