In Preparing Its Adjusting Entries at the End of This

In preparing its adjusting entries at the end of this year, Milton Company neglected to accrue employees' wages earned but not yet paid or recorded. This error:

A) Understates this year's net income and overstates both liabilities and retained earnings at year-end
B) Overstates this year's net income and overstates both liabilities and retained earnings at year-end
C) Overstates this year's net income and liabilities at year-end, and understates retained earnings at year-end
D) Overstates this year's net income, understates liabilities at year-end, and overstates retained earnings at year-end
E) None of the above