To adjust entries into account, you can sort entries into five categories.

☛ Accrued expenses: Expenses have been incurred but the vendors invoices are not generated or processed yet

☛ Accrued revenues: Revenues have been earned but the sales invoices are not generated or processed yet

☛ Deferred revenues: Money was received in advance of having been paid or earned

☛ Deferred expenses: Money was paid for a future expense

☛ Depreciation expense: An asset purchased in one period must be allocated to expense in each of the accounting periods of the asset’s useful life