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. Inventories were overstated. b.Total assets were understated. c.Total liabilities were understated. d.Cash was understated. e.Retained Earnings was overstated. f. Accounts Payable was understated.