true or false When services are provided to patients on account both the balance sheet and income statement are affected. Prepaid expenses and unearned revenues are accounts that record deferrals and must be adjusted at the end of the period to properly match revenues and expenses. 3. When making an adjustment to recongize the supplies used, total assets would not change. 4. Physical assets of longterm nature are referred to as fixed assets. 5. Land is an example of an intangible asset. 6. The first golden rule of adjustments is that every adjustment affects at least one balance sheet account and one income statement account. 7. The second golden rule of adjustments says that you can only adjust cash if it also affects a revenue account. 8. Liabilities that will not be due for more that one year are called longterm liabilities. 9. Under the accrual basis of accounting, the accounting records should be adjusted so they are accruate before you prepare the statement of retained earnings.