An Audit of Forever Young Cosmetics Reveals That Beginning Inventory

An audit of Forever Young Cosmetics reveals that beginning inventory was understated by $3,000. Which of the following will result from the correction of this error?

A) Net income will be reduced by $3,000.
B) Cost of goods sold will be reduced by $3,000.
C) Gross profit will be increased by $3,000
D) Both B and C.