Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause

A) net income to be understated.
B) an overstatement of assets and an overstatement of liabilities.
C) an understatement of expenses and an understatement of liabilities.
D) an overstatement of expenses and an overstatement of liabilities.

Accrued Expense

Expenses that have been incurred but not yet paid or recorded in the financial statements, reflecting obligations that a business has taken on.

Net Income

The total revenue of a company minus all expenses and taxes; a measure of the company's profitability over a specific time period.

Liabilities

Financial obligations or debts that a company owes to others, reflected on the balance sheet.