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

Which accounting process involves comparing what was planned with the actual performance to ensure that financial records accurately reflect the company's financial position, especially regarding prepaid expenses?

Adjusting journal entries

Posting to the general ledger

Preparing a trial balance

Recording initial transactions

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Verified step by step guidance

Understand the purpose of the accounting process: The goal is to ensure that financial records accurately reflect the company's financial position, particularly for items like prepaid expenses. This involves aligning planned amounts with actual performance.

Review the concept of adjusting journal entries: Adjusting entries are made at the end of an accounting period to update accounts for transactions that have occurred but are not yet recorded, such as prepaid expenses that have been partially used.

Examine the role of posting to the general ledger: This process involves transferring journal entries to the ledger accounts, but it does not specifically address the comparison of planned versus actual performance.

Consider the preparation of a trial balance: A trial balance is a summary of all ledger accounts to check for errors in recording, but it does not involve adjusting entries for prepaid expenses.

Analyze the recording of initial transactions: Initial transactions are recorded when they occur, but they do not involve the comparison of planned versus actual performance or adjustments for prepaid expenses.