Failure to Make an Adjusting Entry to Recognize Accrued Salaries

Multiple Choice

Failure to make an adjusting entry to recognize accrued salaries payable would cause which of the following?

A) an understatement of expenses and liabilities and an overstatement of shareholders' equity.
B) an overstatement of expenses and liabilities.
C) an understatement of expenses,liabilities and shareholders' equity.
D) an understatement of assets and shareholders' equity.