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? A Inventories were understated. B Accounts Receivable was overstated. C Expenses were understated. D Revenue was understated. E Accounts Payable was understated. F Retained Earnings was understated.