Answer:
The answer is C, that is, for the inaccurate accounting recording described in the question, inventory is most likely to be overstated.
Step-by-step explanation:
For the year XX, any sales happening in the last two days of the year must be recorded in the year XX. However, as sales journal closes 02 days before year end, these recordings will be recorded in (XX +1) year.
As a sales transaction happens, Cash and Account Receivable go up (Dr), Sales also increases (Cr) while Inventory decreases (Cr).
With the early closing of sales journal, as explained above, if any sales takes place in the last two days of the year, Cash and Account Receivable and Sales for the year XX will be understated (because they are inaccurately recorded in the (XX+1) year ) and Inventory will be understated (also because they are inaccurately recorded in the (XX+1) year).