Module 1: Chapter 3: Review Questions Assignment 1. What is the difference between the cash basis and the accrual basis of accounting? 2. Why is the accrual basis of accounting generally preferred over the cash basis? 3. What is a prepaid expense and where is it reported in the financial statements? 4. What type of assets require adjusting entries to record depreciation? 5. What contra account is used when recording and reporting the effects of depreciation? Why is it used? 6. What is unearned revenue and where is it reported in the financial statements? 7. What is an accrued revenue? Give an example. 8. What is a trial balance? 9. What is a adjusted trial balance? 10. List the type of financial statements prepared at the end of the year