The accountant for Ella Company made the following errors related to the inventory in 2016: 1. The beginning inventory for 2016 was understated by $1,350 due to an error in the physical count. 2. A $1,500 purchase of merchandise in transit was not recorded as a purchase and was not included in ending inventory. ? Assuming a periodic inventory system, Ella Company's 2016 net income will be
A) understated by $150.
B) overstated by $1,350.
C) overstated by $1,500.
D) overstated by $150.
B
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