Which of the Following Reflects the Balances of Prepayment Accounts

Multiple Choice

Which of the following reflects the balances of prepayment accounts prior to adjustment?

A) Balance sheet accounts are understated and income statement accounts are understated.
B) Balance sheet accounts are overstated and income statement accounts are overstated.
C) Balance sheet accounts are overstated and income statement accounts are understated.
D) Balance sheet accounts are understated and income statement accounts are overstated.