If a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements? Assets will be overstated and profit and owner's equity will be understated. Expenses will be overstated and profit and owner's equity will be understated. Failure to make an adjustment does not affect the financial statements. Assets will be overstated and profit and owner's equity will be overstated.

If a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements? Assets will be overstated and profit and owner's equity will be understated. Expenses will be overstated and profit and owner's equity will be understated. Failure to make an adjustment does not affect the financial statements. Assets will be overstated and profit and owner's equity will be overstated