14. Accrued litigation liability of $327,000 were not recorded at December 31, 2019. This error got counter-balanced when cash payment of $327,000 was made to in 2020 for settlement of a lawsuit. The error was never discovered or corrected. The effect of the error would cause

Group of answer choices

December 31, 2019 retained earnings to be overstated $327,000 and December 31, 2020 retained earnings to be correct.

2019 net income to be overstated $327,000 and December 31, 2020 retained earnings to be understated $327,000.

2019 net income and December 31, 2019 retained earnings to be understated $327,000 each.

2019 net income to be understated $327,000 and 2020 net income to be overstated $327,000.