The September 30, 2008 physical inventory of Baxter Corporation appropriately included $3,800 of merchandise purchased on account that was not recorded in purchases until October 2008. What effect will this error have on September 30, 2008 assets, liabilities, retained earnings and earnings for the year then ended, respectively?

a) understate; no effect; overstate; overstate

b) no effect; overstate, understate; understate

c) no effect; understate; overstate; overstate

d) no effect; understate; understate; overstate