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A company purchased Inventory with cash but mistakenly recorded the transaction as follows: DR Accounts Payable CR Cash A. As a result of the error,

A company purchased Inventory with cash but mistakenly recorded the transaction as follows:

DR Accounts Payable

CR Cash

A. As a result of the error, which accounts are overstated?

B. Which accounts are understated?

C. What journal entry would be necessary to correct this error?

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