Financial Accounting Discussion. Explain why firms often encounter the need to account for prepaid assets and...
Financial Accounting Discussion.
Explain why firms often encounter the need to account for prepaid assets and unearned income and related adjusted entries.
Homework Answers
As per Generally Accepted Accounting Principles, only accrual system of accounting should be followed by organizations
Under accrual system of accounting, expenses and income of a particular period are recorded only in that period and any expense incurred for future or any income received which is not relating to this period is to be carried forward to next period as prepaid expenses or unearned revenue in order to match income and expenses of a particular period
Due to the above reason, it is required to make adjusting entries at year end to record prepaid expenses and unearned revenue
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Financial Accounting Discussion.
Explain why firms often encounter the need to account
for prepaid assets and...
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I was unable to edit my last post.
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