What is the best way to remember what will overstate or understate an asset, equity, expense, revenue and liability if adjustments are not made. Is there a way that I can remember the concepts easily because I find myself taking awhile to analyze. I know the normal balances for each accounts but do I think of it the opposite effect it has on the accounts if adjustments are not made? It's confusing for me and yet it seems very practical. Can anyone give me any tips to make it easier for me to understand without getting confused. It sounds so simple and practical but I find myself analyzing the accounts and it is taking me too long. I want to be more efficient at answering problems. I really appreciate any feedback.

are for transactions and events that extend over more than one period. (Adjusting entries nue account. These adjustments are posted like any other entry.) Exhibit 3.12 summarizes the four types of transactions requiring adjustment. Understanding statements. is important to understanding process and its importance one or Remember that each adjusting entry affects one or more income statement accounts more balance sheet accounts (but never the Cash account) BEFORE Adjusting Category Balance Sheet Income Statement Adjusting Entry Prepaid expenses Asset overstated Expense understated Dr. Expense Equity overstated Unearned revenuest Liability overstated Revenue understated Dr. Liability Equity understated Cr. Revenue Accrued expenses Liability understated Expense understated Dr. Expense Equity overstated Cr. Liability Accrued revenues Asset understated Revenue understated Dr. Asset Equity understated Cr. Revenue For depreciation, the credit is to Accumulated Depreciation (contra asset) Exhibit assumes that prepaid expenses are initially recorded as assets and that unearned revenues are initially recorded as liabilities Information about some adjustments is not always available until several days or even week the period-end. This means that some adjusting and closing entries are recorded later thar out dated as of, the last day of the period. One example is a company that receiesa utility bi