X Company prepares monthly financial statements. In January, it purchased inventory on account. The accountant recorded the transaction as an increase in Inventories and an increase in Retained Earnings. As a result, which of the following is true regarding the January financial statements? Inventories were understated. O Retained Earnings was understated. O Revenue was understated. O Expenses were understated. Accounts Receivable was overstated. O Accounts Payable was understated