What Is the Effect on the Financial Statements When a Company

Multiple Choice

What is the effect on the financial statements when a company fails to record depreciation expense at year-end?

A) Net income is overstated and stockholders' equity is understated.
B) Expenses are understated and stockholders' equity is understated.
C) Expenses are understated and liabilities are overstated.
D) Net income is overstated and assets are overstated.