The balance in the unearned rent account for Jones Co. as of December 31 is $1,200. If Jones Co. failed to record the adjusting entry for $600 of rent earned during December, the effect on the balance sheet and income statement for December would be: Assets understated by $600; net income overstated by $600. Liabilities understated by $600; net income understated by $600. Liabilities overstated by $600; net income understated by $600. Liabilities overstated by $600; net income overstated by $600. Q2. Would AT&T (T) and Microsoft (MSFT) use the cash basis or the accrual basis of accounting? Explain. Q3. Why are adjustments needed at the end of an accounting period? Equipment: Q4. Describe the nature of the assets that compose the following sections of a balance sheet: Balance Sheet: Property, Plant, and