Either the first or the second could be correct, but the first is more likely. The second would be used in a situation where more than one thing was happening at the same time. For example, I saw the accident happening while I was walking my dog.. The third might be possible if you meant "I saw (that) the accident happened," although it would be better as " I saw that the accident had happened."

"True" means it exists in reality. Did you really observe an accident? Your question should be, "Is this correct?" (ie. without errors)