1010.)

A company using the periodic inventory system correctly recorded a purchase of merchandise, but the merchandise was not included in the physical inventory count at the end of the accounting period. The error caused which of the following?

A.) An overstatement of net income and inventory.

B.) An understatement of inventory, purchases, and accounts payable.

C.) An overstatement of inventory, purchases, and accounts payable.

D.) An understatement of both net income and inventory.