All sales and purchases for the year at Ross Corporation are credit transactions. Ross uses a perpetual inventory system. During the year, it shipped certain goods to customer and excluded from ending inventory although the sale was not recorded. Which one of the following statements is correct? Explain why your team chose this answer?

a. Accounts receivable was not affected, inventory was not affected, sales were understated, and cost of goods sold was understated.

b. Accounts receivable was understated, inventory was not affected, sales were understated, and cost of goods sold was understated.

c. Accounts receivable was understated, inventory was overstated, sales were understated, and cost of goods sold was overstated.

d. Accounts receivable was understated, inventory was not affected, sales were understated, and cost of goods sold was not affected