please help me with explaining this excercise. thank you

Part 11- (10 points) Effect of Errors on Financial Statements Given below are several moes that a company made in recording a variety of transactions INSTRUCTIONS. Determine the effect of each error on the net income and retained earnings for the 20x0 and 20x1 financial statements. For each crror, you are to tell whether there is an overstatement, understatement, or no effect on net income and retained carnings. Place either an "O" Coventutement), a "U" understatement), or "N" no effect) in each blank The first is given as an example Net Income for Retained Earnings for 20X0 20x1 20X0 20X1 N 0 N O 2 Inventory was overstated at the end of 20x1. a. Inventory was understated at the end of 20x0 U 0 b. The purchase of a new truck with a five-year life was recorded in 20X0 as delivery expertise U O UU c. A puhee of merchandise on credit in late 20x0 wa not recorded until carly 20X1. The merchandise was correctly included in the December 31, 20X0 physical inventory 0 U ON d A January 1, 2oxo, purchase of a 2 year fire insurance policy was charged to insurance expense and so adjustments were made at the end of either 20X0 or 20X1. U 0 UN C No depreciation expense was recorded at the end of 20x0 0 N DO I I Roses Sales COGS Other Exp BBRIE NE div EBRIE V NI N GS A 0 + ZT DE 0