On July 1, Mize paid $24,000 for a two-year insurance policy, increasing Prepaid Insurance for the full amount. If the adjusting entry is not made at December 31, the end of the accounting period, how does the error affect this years financial statements? Select one: a. Overstates assets b. Overstates expenses c. Overstates revenue d. Does none of the above e. Understates common stock