Group 2 ACCT1501Case 5B Accrual Accounting AdjustmentsGroup 2Group 2 ACCT1501What are Accrual Accounting Adjustments?Accrualadjustmentsistheprocessb!hich routineaccrualsareappliedtothe"nancial statements#Themaintpeso$adjustmentsare thee%pirationo$assets&unearnedre'enues& accrualo$unrecordede%pensesandaccrualo$ unrecorded re'enues# Group 2 ACCT1501(uestions1# )ro'ide e%amples o$ accrual accounting adjustments 2# *%plain each o$ the adjustmentsGroup 2 ACCT1501*%amples)amentsinad'ance+these!ouldrepresent pamentsthatthe,-W.aritimehasmadein ad'ancei#e#thosein!hichcosthasnotbeen recogni/edsincethegood0ser'icehasnotbeen pro'idedCan also be re$erred to as a prepayment)repamentsin'ol'eadebittotheprepaments account1underassets2andacredittothecash account34oncetheser'icehasbeenpro'ided&the journalentries!ouldthenbeadjustedtore5ectthis !ith a debit to e%penses and credit to prepaments Group 2 ACCT1501*%amples 1cont#2 Accrued 6ncome7 this represents income that has not been recei'edetbut$or!hichtheser'icehasbeenpro'ided# 8or instance& the end o$ the "nancial period here is 90 :une 2011& ho!e'er!e ;no! $rom the notes that paments $or trade can be made up until the end o$ the $ollo!ing month# There$ore&atradablegood0ser'icemaha'ebeen pro'idedinthemontho$:une2011&ho!e'erpamentis note%pecteduntil:ul2011#-incethere'enuehereis unrecorded&!e!ouldincludeitintheaccruedre'enue account#