During 20Y5, the accountant discovered that the physical inventory at the end of 20Y4 had been understated by $42,750. Instead of correcting the error, however, the accountant assumed that the error would balance out (correct itself) in 20Y5. Which of the following is correct?

a. When an error is discovered affecting the prior period, it should be corrected. In this case, the inventory account should be debited and the retained earnings account credited for $42,750.

b. Failure to correct the error for 20Y4 and purposely misstating the inventory and the cost of goods sold in 20Y5 would cause the income statements for the two years to not be comparable.

c. The balance sheet at the end of 20Y5

d. "When an error is discovered affecting the prior period, it should be corrected. In this case, the inventory account should be debited and the retained earnings account credited for $42,750." and "Failure to correct the error for 20Y4 and purposely misstating the inventory and the cost of goods sold in 20Y5 would cause the income statements for the two years to not be comparable." are correct.

e. "Failure to correct the error for 20Y4 and purposely misstating the inventory and the cost of goods sold in 20Y5 would cause the income statements for the two years to not be comparable." and "The balance sheet at the end of 20Y5 would be incorrect unless an adjustment is made." are correct.