On December 31, 2012, the Adjusting Entry for Depreciation Was

Multiple Choice

On December 31, 2012, the adjusting entry for depreciation was made incorrectly. The following entry was made erroneously: The correct amount of depreciation should have been $5,100. Consider the effects of this error on the income statement, and identify which of the following statements is TRUE.

A) Net income is overstated by $3,600.
B) Net income is understated by $3,600.
C) Net income is understated y $1,500.
D) Net income is not affected by this error.