On April 1, 2016, SBD Corp. purchased a year of property insurance for $120,000, and recorded this payment as an increase to insurance expense. What is wrong with SBDs financial statements if no adjustment is made at SBDs fiscal year of December 31, 2016?

a) Insurance expense is understated by $30,000

b) Current liabilities are understated by $30,000

c) Retained earnings is understated by $30,000

d) Cash flows from operations is overstated by $30,000

e) None of the above