Waterfalls Corporation purchased a one-year insurance policy in January 2009 for $60,000. The insurance policy is in effect from March 2009 through February 2010. If the company neglects to make the proper year-end adjustment for the expired insurance:
a) net income and assets will be understated by $50,000
b) net income and assets will be overstated by $10,000
c) net income and assets will be overstated by $50,000
d) net income and assets will be understated by $10,000