This is a question in my class that needs to be answer with at least 150 words. I would like for you to use your own words, but if not Cite-in-text with reference. No Plagiarism

Every time a company prepares financial statements, adjusting entries are required. Generally, financial statements are prepared at the end of each month, the end of each quarter and at the end of each year.

There are two categories of adjusting entries: Accruals and Deferrals. Pick one of the adjusting entries (Prepaid expenses, unearned revenues, accrued revenues or accrued expenses), indicate whether it is an accrual or deferral, explain why it is important and provide an example.

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