Your company purchased $2,000 of supplies and recorded the amount as an asset. At year end, a physical count shows $700 of supplies on hand. Before closing the books, it is discovered that an adjusting entry was never made. If no correcting entry is made, the balance sheet will be accurate, but the income statement will be understated assets will be understated and net income will be overstated assets will be overstated and net income will be overstated the income statement will be accurate, but the balance sheet will be understated assets will be overstated and net income will be understated assets will be understated and net income will be understated