Types of Adjusting Entries
Most adjusting entries could be classified this way:
| Prepayments (Deferral - cash paid or received before consumption) | Accrual - cash paid or received after consumption | |
| Expenses | Prepaid expenses: for expenses paid in cash and recorded as assets before they are used | Accrued expenses: for expenses incurred but not yet paid in cash or recorded |
| Revenues | Unearned revenue: for revenues received in cash and recorded as liabilities before they are earned | Accrued revenues: for revenues earned but not yet recorded or received in cash |
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