1. A company using a perpetual inventory system neglected to record a purchase of merchandise on account at year end. This merchandise was omitted from the year-end physical count. How will these errors affect assets, liabilities, and stockholders' equity at year end and net income for the year? Assets Liabilities Stockholders' Equity Net Income a. No effect Understate Overstate Overstate. b. No effect Overstate Understate Understate. c. Understate Understate No effect No effect. d. Understate No effect Understate Understate