Shumway Company accumulates the following adjustment data as at 31 December. For each of the items indicate the following: (a) the type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense); (b) the accounts before adjustment (overstatement or understatement).

1.	Services provided but not recorded total $750.
2.	Store supplies of $300 have been used.
3.	Utility expenses of $225 are unpaid.
4.	Unearned revenue of $260 has been earned.
5.	Salaries of $900 are unpaid.
6.	Prepaid insurance totalling $350 has expired.

	(a)	(b)
Item	Type of adjustment	Accounts before adjustment
1.	Unearned incomePrepaid expensesAccrued expensesAccrued income	Expenses understated, Liabilities understatedAssets understated, Income understatedAssets overstated, Expenses understatedLiabilities overstated, Income understated
2.	Prepaid expensesUnearned incomeAccrued expensesAccrued income	Liabilities overstated, Income understatedAssets overstated, Expenses understatedAssets understated, Expenses understatedExpenses understated, Liabilities understated
3.	Accrued incomeUnearned incomeAccrued expensesPrepaid expenses	Liabilities overstated, Income understatedExpenses understated, Liabilities understatedAssets understated, Expenses understatedAssets overstated, Expenses understated
4.	Unearned incomeAccrued expensesAccrued incomePrepaid expenses	Assets overstated, Expenses understatedLiabilities overstated, Income understatedAssets understated, Expenses understatedExpenses understated, Liabilities understated
5.	Accrued expensesAccrued incomeUnearned incomePrepaid expenses	Assets overstated, Expenses understatedAssets understated, Expenses understatedExpenses understated, Liabilities understatedLiabilities overstated, Income understated
6.	Accrued expensesPrepaid expensesAccrued incomeUnearned income	Expenses understated, Liabilities understatedLiabilities overstated, Income understatedAssets overstated, Expenses understatedAssets understated, Expenses understated

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