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? Accounts Payable was understated. Accounts Receivable was overstated. Retained Earnings was understated. O Expenses were understated. O Inventories were understated. Revenue was understated. Submit Answer Tries 0/99