At the End of a Financial Year,businesses Often Have "Prepayments

At the end of a financial year,businesses often have "prepayments" which are amounts paid in advance,and "Accruals" which are amounts owing.For example,the business may have prepaid a month's rent.It may also have used some utilities that it has not yet paid for.The accounting treatment is as follows:

A) Adjust the relevant accounts in the Income Statement. Prepayment is a current asset. An Accrual is a current liability, both of which are shown on the Statement of Financial Position.
B) Do nothing. The money will eventually catch up with the accrued transactions, and the prepaid items will be used in the next financial year.
C) Adjust only the accrued amounts - show the additional utilities on the Income Statement and show an Accrual as a current liability on the Statement of Financial Position. Prepayments should be ignored
D) Adjust only the prepaid amounts - reduce the rent on the income statement and show the prepayment as a current asset on the Statement of Financial Position. Accruals should be ignored