If ending inventory is understated by $10,000, the effect of this error in the current period is that;

Select one:

Assets are overstated by $10,000; Equity is overstated by $10,000.

Assets are overstated by $10,000; Equity is understated by $10,000.

Assets are understated by $10,000; Equity is overstated by $10,000.

Assets are understated by $10,000; Equity is understated by $10,000.