Tennis Shoe Warehouse operates in a state with a $6\mathrm{.}5\%$ sales tax. For convenience, Tennis Shoe Warehouse credits Sales Revenue for the total amount $($selling price plus sales tax$)$ collected from each customer. If Tennis Shoe Warehouse fails to make an adjustment for sales taxes,

A$.$ net income will be understated and liabilities will be overstated.

B$.$ net income will be understated and liabilities will be understated.

C$.$ net income will be overstated and liabilities will be overstated.

D$.$ net income will be overstated and liabilities will be understated.