A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in:

Select one:

a. $200 decrease in net income.

b. $200 increase in net income.

c. $200 difference between the debit and credit columns of the Unadjusted Trial Balance.

d. $200 of prepaid insurance.

e. An error in the financial statements.