On October 1, Bailey Company paid $11,700 for one year of advertising in advance. Bailey debited Advertising Expense, which is an alternate way of recordin the initial expenditure. The advertising expense will be used evenly throughout the year. If the appropriate adjusting entry is not made at the end of the year, (a) Income statement accounts (overstated, understated, or no effect)? (b) Net Income (overstated, understated, or no effect)? (c) Balance sheet accounts (overstated, understated, or no effect)? Income Statement Accounts Revenue: Choose One Expenso: Choose One Net Income Choose One Balance Sheet Accounts Assets Choose One Liabilities: Choose One Retained Earnings: Choose One X 2