please give clear simple explanation :)

In making adjusting entries at the end of its accounting period, Chao Consulting mistakenly forgot to record: 1. $3,200 of insurance coverage that had expired (this $3,200 cost had been initially debited to the Prepaid Insurance account). 2. $2,000 of accrued salaries expense. As a result of these two oversights, the financial statements for the reporting period will; Multiple Choice Understate assets by $3,200. Understate expenses by $5,200. Understate net income by $2,000. Overstate lobilities by $2,000