Elects of adjusting entries on financial statements Problem typ Mida v On March 1, Morris Company paid $21,600 for two years of insurance in advance. Morris debited Prepaid Insurance. If the appropriate the made at the end of the year, what will be the effect on: (a) Income statement accounts (overstated, understated, or no effect)? (6) Net income (overstated, understated, or no effect)? ( Batance sheet accounts (overstated, understates, or no effecty? B Income Statement Accounts RAVI Choose One Choose One Net Income Choose One = NG ENTRIES Effects of adjusting entries on financial statements: Problem typ... Income Statement Accounts Revenue: Choose One Expense: Choose One Net Income: Choose One Balance Sheet Accounts Assets: Choose One Liabilities: Choose One Retained Earnings: Choose One 5