Ariadne draws up her financial statements up to 31 December every year. On 31 December 2021, she recorded all of her inventory at cost, although some inventory that cost $500$ had a net realisable value of $350$. What impact did this mistake have?
- AGross profit for the year 2021 was overstated.
- BTotal assets at 31 December 2021 were understated.
- CProfit for the year 2022 was overstated.
- DCapital at 31 December 2022 was understated.