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Type of adjustment Classify the following items as (1) accrued revenuc, (2) accraed expense, (3) uneamed revenue, or (4) prepaid expense: Fondeace roleck Mr wor Consider the accounts invoived in oach situation. Prepaid expenses are paid in advance of being used, and assets became expenses as they are used. Unearned revenues represent money received before it is eamed, which is a liability. Accruals ate expenses that have been incurred and revenues that have been earned and now need to be recorded