What is the combined effect on net income of a $$25,000$ understatement error to ending inventory for the two$-$year period if the error is not corrected?

Select answer from the options below

Net income will be overstated by $$25,000.$

Net income will be understated by $$25,000.$

The errors are cumulative and the total net income error will be double.

The errors cancel out and the total net income for the two periods will be correct