Another example of a transaction affecting two balance sheet accounts and no income statement account is a deposit for future services. The payer will debit the asset Prepaid Expenses and will credit the asset Cash. The company receiving the payment will debit Cash and will credit a liability account such as Customer Deposits, Unearned Revenues or Deferred Revenues.
Adjusting entries are a classification of accounting entries that will affect a balance sheet account and an income statement account.
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