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? Expenses were understated. Inventories were understated. O Accounts Payable was understated. Revenue was understated O O Accounts Receivable was overstated. Retained Earnings was understated. RX3 Tries 0/99