If Cost of Goods Sold Was Understated in Period 1

Multiple Choice

If Cost of Goods Sold was understated in Period 1, then Cost of Goods Sold and gross profit in Period 2 will be:

A) both understated.
B) both overstated.
C) understated for cost of goods sold and overstated for gross profit.
D) overstated for cost of goods sold and understated for gross profit.