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3. On December 1, Year One, a company receives $10,000 in advance for work it will perform in January, Year Two. The company accountant immediately

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3. On December 1, Year One, a company receives $10,000 in advance for work it will perform in January, Year Two. The company accountant immediately recorded the $10,000 as revenue and no adjusting entry was made on December 31, Year One. Based on that action, which of the following is true? a. At the end of Year One, liabilities are overstated b. At the end of Year One, net income is overstated c. At the end of Year One, retained earnings is correctly stated d. At the end of Year Two, net income is overstated e. At the end of Year Two, retained earnings is understated

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