Items That Were Incorrectly Omitted from 2013 Credit Purchases, but Correctly

Multiple Choice

Items that were incorrectly omitted from 2013 credit purchases, but correctly included in the 2013 ending inventory would have the following 2013 effects:

A) overstate pre-tax income but have no effect on current liabilities.
B) overstate pre-tax income and understate liabilities.
C) cancel out with no effect on pre-tax income but would understate current liabilities.
D) understate pre-tax income but have no effect on liabilities.