Chen CoAccepted Delivery of Merchandise Which It Purchased on Account

Chen Co.accepted delivery of merchandise which it purchased on account.As of December 31, Chen had recorded the transaction, but did not include the merchandise in its inventory.The effect of this on its financial statements for December 31 would be

A) net income, current assets, and retained earnings were understated.
B) net income was correct and current assets were understated.
C) net income was understated and current liabilities were overstated.
D) net income was overstated and current assets were understated.