1.Trans Company debited Prepaid Insurance for $1，320 on July 1，2014，for a one-yearfire insurance policy. If the company prepares monthly financial statements, failure to make an adjusting entry on July 31 for the amount of insurance that has expired would cause:
(A)assets to be overstated by $1, 320 and expenses to be understated by $1，320.
(B)expenses to be overstated by $110 and assets to be understated by $110.
(C)assets to be overstated by $110 and expenses to be understated by $110.
(D)expenses to be overstated by $1，320 and assets to be understated by $1，320.