Exercise 4 < What would happen if you omitted the following adjustments? How would the omission effect the income statement and the balance sheet? < Example: < Depreciation Expense < Accumulated Depreciation < XXX Income Statement: Expenses are understated - Net income overstated < Balance Sheet: Assets are overstated - Equity is overstated < < 1 < Interest Expense < Interest Payable < < < 2 < < < 3 < Rent Expense Prepaid Expense or Prepaid Rent Unearned Revenue < < Revenue < < XXX < < XXX < < XXX < XXX XXX XXX < < < XXX