There are four types of adjusting entries 1- 2- Prepaid Expenses Accrued Revenues Accrued Expense Unearned Revenues 3- 4- Type 1: Prepaid Expenses These are expenses paid in advance and recorded as assets prior to being use

Ans: All these itme are balance sheet item that presented as asset or liabilities.

Brief explantion is given as below:

1. Prepaid Expesnes: Simply, it means amount has been paid but expenses have not yet being incurred. So this advance payment becomes Asset and when related expenses are incurred this prepaid expenses are charged to P&L account. For example, Insurance Expenses.

2. Accrued Revenue: Accrued Revenue is nothing but accounts receivable. It is revenue which have not been earned but money is still not received. It is adjusted on subsequent receipt of money due from cutomer.

3. Accrued Expenses:  Accrued Expenses are expenses which have been incurred but  payment has not been made yet. Theses are recognised in the books on liability side before these are paid. On subsequent payment these are adjusted.

4.Unearned Revenue: It is money received for a service or product that has yet to be provided or delivered.It is recorded on a company’s balance sheet as a liability because it represents a debt owed to the customer. Once the product or service is delivered, unearned revenue becomes revenue on the income statement.