if adjusting entries are not prepared, which financial statements are misstated? a. income statement…

Brief Explanations:

Adjusting entries affect revenues, expenses (which are on the income statement), assets, liabilities (on the balance sheet), and net income (which impacts retained earnings on the statement of retained earnings). For example, if prepaid rent (an asset) is not adjusted to record rent expense (an expense on income statement), net income is overstated (affecting retained earnings). So all three statements - income statement (for revenues/expenses), balance sheet (for assets/liabilities), and statement of retained earnings (due to net - income impact) - are affected.

Answer:

A. income statement, balance sheet and statement of retained earnings