QUESTION If a journal entry and posting for the use of one month of rent from the prepaid rent account during the year is accidently omitted, what would be the impact on the financial statements? ANSWER Net Income would be overstated (Expenses understated) and Balance Sheet liabilities would be overstated. Net Income would be understated (Expenses overstated) and Balance Sheet assets would be understated. Net Income would be understated (Expenses overstated) and Balance Sheet liabilities would be understated. Net Income would be overstated (Expenses understated) and Balance Sheet assets would be overstated. I DON'T KNOW YET