On December 31, 20X1, Katherine Company purchases merchandise with shipping terms FOB destination. The company's accountant records the purchase on the day the order is placed. The merchandise is not included in the ending inventory. No additional journal entry is made when the merchandise arrives on January 5, 20x2. As a result of this error, Katherine Company's 20X1 Multiple Choice income will be overstated. income will be understated. ending inventory is understated. ending inventory is overstated. On December 31, 20X1, Katherine Company purchases merchandise with shipping terms FOB destination. The company's accountant records the purchase on the day the order is placed. The merchandise is not included in the ending inventory. No additional journal entry is made when the merchandise arrives on January 5, 20X2. Assume that the error is not discovered. As a result of this error, Katherine Company's 20X2: Multiple Choice income will be overstated. income will be understated. ending inventory is understated. ending inventory is overstated