Question

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

Balance sheet accounts are understated and income statement accounts are understated
Balance sheet accounts are overstated and income statement accounts are overstated
Balance sheet accounts are understated and income accounts are overstated
Balance sheet accounts are overstated and income statement accounts are understated

Answer 1

The answer is Balance sheet accounts are overstated and income statement account are understated.

Step-by-step explanation: