Corp. fails to adjust the Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements?

Question $3$Select one:

a$.$

Expenses will be overstated and net income and shareholders' equity will be understated.

cross out

b$.$

This will have no effect on the financial statements.

cross out

c$.$

Assets will be overstated and net income and shareholders' equity will be overstated.

cross out

d$.$

Assets will be overstated and net income and shareholders' equity will be understated.