1. When do prepayments occur? Accruals?

2. Describe the appropriate adjusting entry for prepaid expenses and for unearned expenses. What is the effect on net income, assets, liabilities, and shareholders' equity of not recording a required adjusting entry for prepayment?

3. Describe the required adjusting entry for accrued liabilities and for accrued receivables. What is the effect on net income, assets, liabilities, and shareholders' equity of not recording a required adjusting entry for accruals