A is the correct answer.

It's A! Admin please read commentaries from users and adjust answers for all questions as needed. Thank you

It's B

It's A. Per this article, an understatement of the Beginning Inventory will result in an understated COGS and overstated Net Income: https://opentextbc.ca/principlesofaccountingv1openstax/chapter/explain-and-demonstrate-the-impact-of-inventory-valuation-errors-on-the-income-statement-and-balance-sheet/#:~:text=Inventory%20errors%20at%20the%20beginning%20of%20a%20reporting,cost%20of%20goods%20sold%20and%20overstated%20net%20income.

Is it because the company is using periodic inventory so at the end of every year they value and verify so whatever error there was in the beginning inventory is already corrected in the ending inventory. Please advise.

If the cost of goods sold will be understated how come there will be no impact on the net income? The net income will be overstated.