Following the preparation of the profit and loss account, it is discovered that work-in-progress has been overvalued by $2,000 and an accrued expense of $500 has been overvalued. This will have resulted in ______.
A.
an overstatement of net profit of $2,500.
B.
an understatement of net profit of $2,500.
C.
an overstatement of net profit of $1,500.
D.
an understatement of net profit of $1,500.