Tawdry Company Debited Prepaid Insurance for $900 on May 1

Tawdry Company debited Prepaid Insurance for $900 on May 1, 2012, for a one-year fire insurance policy. If the company prepares monthly financial statements, failure to make an adjusting entry on May 31, for the amount of insurance that has expired would cause:

A) assets to be overstated by $900 and expenses to be understated by $900.
B) expenses to be overstated by $75 and assets to be understated by $75.
C) assets to be overstated by $75 and expenses to be understated by $75.
D) expenses to be overstated by $900 and assets to be understated by $900.