Cara, IncPurchased Supplies Costing $2,500 on January 1, 2011 and Recorded

Cara, Inc.purchased supplies costing $2,500 on January 1, 2011 and recorded the transaction by debiting an expense.At the end of the year $1,300 of the supplies are still on hand.If Cara, Inc.does not make the appropriate adjusting entry, what is the impact on its statement of financial position at December 31, 2011?

A) Assets understated by $1,200.
B) Equity understated by $1,200.
C) Equity overstated by $1,300.
D) Assets understated by $1,300.