Discussion question 2
1). Define the accrual basis of accounting, and why it is generally preferred over the cash basis?
2). Describe the two main types of adjusting entries (deferrals and accruals), and give at least 1 example of EACH of the 2 types. (ie, You should have 2 complete journal entries – 1 deferral entry, and 1 accrual entry – Be sure to have a debit account and a credit account with amounts in your entry)
3). Explain what an Unadjusted Trial Balance is, and the relationship between the Unadjusted Trial Balance, adjusting journal entries, and the Adjusted Trial Balance.
Sample Solution
