A company uses a periodic inventory system. The ending inventory balance was overstated by $2,000 at the end of 2022. Identify the effect of this error on each of the following items for the current year.

Cost of goods sold [ Select ] ["overstated", "understated", "no effect"] Net income [ Select ] ["understated", "overstated", "no effect"] Retained earnings [ Select ] ["no effect", "understated", "overstated"] Total assets [ Select ] ["no effect", "understated", "overstated"] Total liabilities