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What is the effect on the financial statements when a company fails to adjust the unearned revenue account for revenues earned at year-end?

On December 31, 2024, Vivid Corporation prepared adjusting entries that included the following items: Depreciation expense: $51,000. Accrued sales revenue: $49,000. Accrued expenses: $26,000. Used insurance: $5,000; the insurance was initially recorded as prepaid. Rent revenue earned: $3,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue. If Vivid Corporation reported total liabilities of $290,000 prior to adjusting entries, how much are Vivid's total liabilities after the adjusting entries?

Which of the following correctly describes the effects of initially recording prepaid insurance expense when cash is paid to purchase an insurance policy?

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