Which of the following reflect the balances of prepayment accounts prior to adjustment? Balance sheet accounts are understated and income statement accounts are understated. Balance sheet accounts are overstated and income statement accounts are overstated. Balance sheet accounts are understated and income statement accounts are overstated. O Balance sheet accounts are overstated and income statement accounts are understated. If a company fails to adjust a Rent Expense account for rent that has not expired, what effect will this have on that month's financial statements? Failure to make an adjustment does not affect the financial statements. Expenses will be overstated and profit and owner's equity will be understated. Assets will be overstated and profit and owner's equity will be overstated. O Expenses will be understated and profit and owner's equity will be overstated