If a required accrued expense adjustment had not been made, the financial statements would have been affected as follows:

Select one:

net income understated, assets overstated, liabilities unaffected, and owner's equity understated

net income overstated, assets unaffected, liabilities understated, and owner's equity overstated

net income overstated, assets overstated, liabilities understated, and owner's equity overstated

net income understated, assets overstated, liabilities understated, and owner's equity unaffected