I need help answering this question: During December of year 1, Nile C. incurred special insurance costs but did not record these costs until payment was made during the following year. These insurance costs directly related to inventory that had been sold by December 31, year 1. What is the effect of the omission of Nile s accrued liabilities and retained earnings at December 31, year 1? Accrued Liabilities: No effect; Retained Earnings: No Effect Accrued Liabilities: No effect; Retained Earnings: Overstated Accrued Liabilities: Understated ; Retained Earnings: Overstated Accrued Liabilities: Understated ; Retained Earnings: No Effect