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In January, X Company, a merchandiser, purchased inventory on account. The accountant incorrectly recorded the...

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Accounting

In January, X Company, a merchandiser, purchased inventory on account. The accountant incorrectly recorded the transaction as an increase in Inventories and a decrease in Retained Earnings. As a result, which of the following is true regarding the January financial statements? Retained Earnings was overstated. Accounts Receivable was overstated. Revenue was understated. Profit was understated. Inventories were understated. Accounts Payable was overstated.

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