In 2021, the internal auditors of Hazelnut Technologies, Inc., discovered that the 2020 accrued salaries of $2.1 million were not recognized until they were paid in 2021. As a result of this error, which of the following is true of Hazelnuts 2020 financial statements:

Group of answer choices

None of the options listed.

Liabilities overstated; Retained earnings understated.

Expenses overstated; Net income understated.

Expenses understated; Retained earnings overstated.

Liabilities overstated; Retained earnings overstated.