Final answer:
Type 1 adjusting entries directly affect Asset and Expense accounts by adjusting for expenses and revenues that have been recorded but not yet earned or incurred, such as depreciation or recognition of prepaid expenses. Option a and e are correct..
Step-by-step explanation:
The student has inquired about which of the following account types is directly affected by a Type 1 adjusting entry: a) Asset b) Liability c) Owners' Equity d) Revenue e) Expense f) Dividend. Type 1 adjusting entries, also known as deferrals, involve adjusting expenses and revenues that have been recorded but not yet earned or incurred. The purpose of these adjustments is to recognize revenue when earned and match expenses with revenues.
Type 1 adjusting entries typically affect two types of accounts: Asset accounts and Expense accounts. For example, an adjusting entry might be made to record depreciation on an asset (affecting an Asset account and an Expense account) or to recognize prepaid expenses that are now incurred (affecting an Asset account as the prepaid amount is reduced and an Expense account as the expense is recognized). Therefore, the correct answer to the student's question is: Asset and Expense accounts are directly affected by a Type 1 adjusting entry.