1- Wages earned by employees during December, unpaid and unrecorded amounted to be $5,400. The next payroll will be made Jan 6th. The company is a calendar year company. The impact will be that:

A. expenses are understated and assets are understated.

B. expenses are understated and liabilities are understated.

C. expenses are overstated and assets are overstated.

D. there is no impact on expenses, assets or liabilities.

2- Bettys Hair Salon rents the upstairs office above Georges Dry Cleaners. Bettys Hair Salon paid $12,600 on Nov 1st for 6 months of rent to George Jones owner of the building. The full amount was credited to Prepaid Rent. George's Dry Cleaners is a calendar year company. If George's Dry Cleaners does not make the entry:

A. liabilities will be overstated and revenue will be understated.

B. assets will be overstated and expenses will be understated.

C. liabilities will be understated and revenue will be overstated.

D. there will be no impact on expenses, assets or liabilities.