The accountant for Eldorado Corp. failed to make the adjusting entry to record depreciation for the current year. The effect of this error is:
a. Assets are over stated, stockholders’ equity and net income are understated.
b. Assets and expenses are understated; net income is understated.
c. Net income is overstated and liabilities are understated.
d. Assets, net income, and stockholders’ equity are all overstated.