Ending inventory for the current accounting period is overstated by $2,700. What effect will this error have on Cost of goods sold and Net income?

A.

Cost of goods sold	Net income
Overstated	Overstated

B.

Cost of goods sold	Net income
Understated	Overstated

C.

Cost of goods sold	Net income
Overstated	Understated

D.

Cost of goods sold	Net income
Understated	Understated