In January, X Company purchased some equipment with $100,000 that it borrowed from a local bank. The accountant recorded the transaction as an increase in Inventories and an increase in Accounts Payable. As a result, on the January balance sheet,

a Total liabilities were understated.

b Cash was understated.

c Total assets were understated.

d Retained Earnings was overstated.

e Inventories were overstated.

f Accounts Payable was understated.