The adjustment for accrued expense eliminates the understatement in Total liabilities Total assets Total revenues Owner's equity The following transactions affect the Statement of Changes in Equity except: Owner's withdrawal of merchandise Results of operations of the current period Collection of prior period receivables Owner's additional investment The following statements are correct EXCEPT for The periodic inventory system is normally used for inexpensive items Merchandise Inventory is only updated after a physical count is done under the periodic inventory system. OPhysical count is only done under the periodic inventory system. Physical count is the basis of ending inventory under the periodic inventory system