Employees are owed $1,700 for services earned but not yet paid on December 31, 2012. These wages will be paid to employees in the first payday in...

Employees are owed $1,700 for services earned but not yet paid on December 31, 2012. These wages will be paid to employees in the first payday in January 2013. No adjustment was made for this item on December 31, 2012. As a result of this error:

a. Liabilities at December 31, 2012 are overstated.

b. Owner's equity at December 31, 2012 is understated.

c. Assets at December 31, 2012 are overstated.

d. 2012 net income is overstated.

e. None of the above.