163 . Masterfalls Corporation purchased a one year insurance policy in January 2010 to $ 60 000 . The insurance policy is in effect from March 2010 through February 2011 . If the company neglects to make the proper year - end adjustment for the expired insurance a . net income and assets will be understated by $50 000 b . net income and assets will be overstated by $50 000 C . net income and assets will be understated by $10 000 d . net income and assets will be overstated by $10 000