Exercise 3 True or False Questions (25 points) State if each statement below is True or False. 1) An adjusting entry for accrued expenses increases a liability account on the statement of financial position and increases an expense account on the income statement. 2) Unearned revenue is a prepayment that requires an adjusting entry when services are performed. 3) Many business transactions affect more than one time period. 4) Accumulated Depreciation is a liability account and has a credit normal account balance 5) Financial statements can be prepared from the information provided by an adjusted trial balance. Bonus question (10 points). The adjusting Entry to record depreciation should be: Dr. Acr. erican College of the Middle East, 2020