(Solved): 10 Multiple Choice 2 points Entity A purchased a three-year insurance policy on January 1 for $9,000 ...

10 Multiple Choice 2 points Entity A purchased a three-year insurance policy on January 1 for

and debited it to Prepaid insurance. If Entity A does not make the proper adjusting entry at the end of the year, which of the following is correct? Hint: Make the correct adjusting entry first. Current assets will be understated Current assets will be unaffected Net income will be overstated Retained earnings will be understated