At the end of December, Campfire Company forgot to record adjusting entries for the year 1. What are the impacts on Campfire Company's Year 1 financial statements for failing to record the adjusting entry below? (Overstated, Understated, No Effect)

Campfire Company received $10,00 in cash from a customer in November Year 1 for a service that was to be provided by Campfire in December. Campfire failed to record any adjusting entries in Year 1 for the service that was provided in December.

Assets: Understated, Overstated, No effect

Liabilities: Understated, Overstated, No effect

Equity: Understated, Overstated, No effect

Net Income: Understated, Overstated, No effect