The Supplies account has a ledger balance of $1,500, but a physical count shows $1,000 on hand What is the effect on the financial statements if the Supplies account is not adjusted? 1) Liabilities will be overstated, and expenses will be understated. 2) Owner's Capital will be overstated, and Net Income will be understated. 3) Revenue will be overstated, and expenses will be overstated. 4) Assets will be overstated, and expenses will be understated