Question: Assume U . S . GAAP ( generally accepted accounting principles ) applies unless otherwise noted. A company receives a payment of $ 1 0

Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
A company receives a payment of $10,000 on 1 December, for rent on a property for December and January. On receipt, they correctly record it as cash and unearned revenue. If at 31 December, their year-end, they failed to make an adjusting entry related to this payment, ignoring taxes, what is the effect on the financial statements for the year?
A.
Assets are overstated by $5,000 and Owners equity is overstated by $5,000
B.
Liabilities are overstated by $5,000 and Owners equity is understated by $5,000
C.
Assets are overstated by $5,000 and Liabilities are overstated by $5,000

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