7. (0,3 marks) In Entity K, a large company, it is discovered just before the annual accounts for year N are finalised that no prepayment adjustment has been made for the rent of a warehouse covering the period 1.3.N to 28.2.N+1. Which of the following makes most sense ? a. The accounts must be adjusted since an error has been made b. The amount involved must surely be insignificant so it is not necessary to revise the accounts at this late stage c. The accounts must be adjusted since the charge for rent in the Profit and Loss account is overstated d. The accounts must be adjusted since otherwise a prepayment asset will be missing from the Balance Sheet

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