Question Content Area During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $224,064 instead of the correct amount of $181,143. The effect on the balance sheet and income statement would be

a. assets overstated by $42,921; retained earnings understated by $42,921; and net income statement understated by $42,921

b. assets overstated by $42,921; retained earnings understated by $42,921; and no effect on the income statement

c. assets, retained earnings, and net income all overstated by $42,921

d. assets and retained earnings overstated by $42,921; and net income understated by $42,921