The recording of adjusting entries is a critical step in the accounting process cycle with the two major classifications of adjusting entries being prepayments and accruals. When do prepayments occur? When do accruals occur?

You must post your initial response to the discussion board by Thursday at $11$:$59$ p$.$m$.$ In your initial post, describe the appropriate adjusting entries for

prepaid expenses and for deferred revenues, and

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 prepayments and for accruals