Proper year-end adjustment for the expired insurance

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Waterfalls Corporation purchased a one-year insurance policy in January 2009 for $60,000. The insurance policy is in effect from March 2009 through February 2010. If the company neglects to make the proper year-end adjustment for the expired insurance:

a) net income and assets will be understated by $50,000

b) net income and assets will be overstated by $10,000

c) net income and assets will be overstated by $50,000

d) net income and assets will be understated by $10,000

Reference no: EM13146736

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