A Firm Has a Current Ratio Greater Than 1 $\begin{array} { l l l } & { \quad\quad\underline{\text { Net income} } } &\quad\quad \underline{\text { Current ratio} } \\\end{array}$

A firm has a current ratio greater than 1.0. If the firm's ending inventory is understated by $3,000 and beginning inventory is overstated by $5,000, the firm's net income and current ratio will be: $\begin{array} { l l l } & { \quad\quad\underline{\text { Net income} } } &\quad\quad \underline{\text { Current ratio} } \\\end{array}$
A. $\begin{array} { l l l } & \text { understated by } \$ 2,000 & \text { too low } \\\end{array}$
B. $\begin{array} { l l l } & \text { overstated by } \$ 2,000 &\quad \text { too low } \\\end{array}$
C. $\begin{array} { l l l } & \text { understated by } \$ 8,000 & \text { too low } \\\end{array}$
D. $\begin{array} { l l l } & \text { understated by } \$ 8,000 & \text { too high }\end{array}$

A) Option A
B) Option B
C) Option C
D) Option D