Chapter4PracticeTest - CHAPTER STUDY OBJECTIVES 1 Explain the revenue recognition principle and the matching principle The revenue recognition principle

Chapter4PracticeTest - CHAPTER STUDY OBJECTIVES 1 Explain...

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CHAPTER STUDY OBJECTIVES1.Explain the revenue recognition principle and the matching principle.2.Differentiate between the cash basis and the accrual basis of accounting.3.Explain why adjusting entries are needed and identify the major types of adjustingentries. 4.Prepare adjusting entries for prepayments.5.Prepare adjusting entries for accruals.6.Describe the nature and purpose of the adjusted trial balance. 7.Explain the purpose of closing entries.

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