Dominique Clement a renowned restauranteur and the owner of the seafood restaurant Rock Lobster Pty Ltd located on King Island in Bass Strait. Her seafood specialty is King Island Crayfish (Lobster), Morten Bay Bugs, Atlantic Salmon, and Northern Territory Barramundi.

Dominique in her quarterly meeting with her accountant seeks advice on several liability issues. She has identified the following concern.

Concern:

The latest invoice from King Island Trading Pty Ltd for $5,000 relating to the purchase of inventory of crayfish has not been recorded but has been delivered. None of the crayfish have been used in the preparation of meals in the Rock Lobster restaurant.

Required:

What would be the impact on net profit if the latest invoice from King Island Trading Pty Ltd for $5,000 was not recorded?

Group of answer choices

No impact on profit. The crayfish would be treated as an asset when the invoice is recorded as it is a future benefit, and the crayfish has not been used to produce a meal.

No impact on profit as the invoice would be treated as Supplies payable.

Due to the invoice not being recorded, meal preparation expenses would be understated, and net profit would be overstated.

Due to the invoice not being recorded, meal preparation expenses would be overstated, and net profit would be understated.