X Company prepares monthly financial statements. In January, it purchased inventory on accounts. 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. revenue was understated

b. accounts payable was understated

c. inventories were understated

d. expenses were understated

e. retained earnings was understated

f. accounts receivable was overstated