Question: What is the effect on the financial statements when a company fails to adjust the prepaid insurance account at year-end for insurance coverage which has

What is the effect on the financial statements when a company fails to adjust the prepaid insurance account at year-end for insurance coverage which has expired? Net income is overstated and stockholders' equity is understated. Expenses are understated and stockholders' equity is understated. Expenses are understated and net income is understated. Net income is overstated and assets are overstated

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