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) Statement of financial position accounts are understated and statement of income accounts are understated.
B) Statement of financial position accounts are overstated and statement of income accounts are overstated.
C) Statement of financial position accounts are overstated and statement of income accounts are understated.
D) Statement of financial position accounts are understated and statement of income accounts are overstated.