Rock Corporation expensed all of its freight-in costs during the companys first year of business. This procedure, expensing all of the companys freight in cost has an impact on the companys financial statements. What will be the impact of expensing all the companys freight in costs?

Assume Rock Corporation has an inventory balance at year-end

Assets Liabilities Owners Equity

A) Overstated Overstated Overstated

B) Understated No Impact Understated

C) Overstated No Impact Overstated

D) Overstated No Impact No Impact

E) Overstated No Impact Understated