If a company makes a prior period adjustment, which of the following describes how it must...

If a company makes a prior period adjustment, which of the following describes how it must be reported?

a. The adjustment is reported in the current period's income statement as a separate item.

b. The adjustment is recorded in retained earnings, and previous years' financial statements presented for comparative purposes are not changed.

c. The adjustment is recorded as a deferred asset or deferred liability and amortized using the straight-line method.

d. The adjustment is recorded in retained earnings, and previous years' financial statements presented for comparative purposes are adjusted.

Solutions

Expert Solution

Answer:-

●D)The adjustment is recorded in retained earnings, and previous years' financial statements presented for comparative purposes are adjusted.

●Explanation :-

A)not reported in income statement

B)purposes are not changed is wrong it would be adjusted

C)not recorded as deferred asset or liability.

D) correct answer

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

1. A company makes a deferral adjustment that decreased a liability. This must mean that a(n):...

1. A company makes a deferral adjustment that decreased a liability. This must mean that a(n): A expense account was decreased by the same amount. B expense account was increased by the same amount. C revenue account was increased by the same amount. D revenue account was decreased by the same amount. 2. When a deferral adjustment is made to an asset account, that asset becomes a(n): A liability. B other asset. C revenue D expense. 3. At the end...

Which of the following is an example of a period cost in a company that makes clothing?

Which of the following is an example of a period cost in a company that makes clothing? Select one: a. Advertising cost for a new line of clothing, b. Factory supervisor's salary c. Fabric used to produce men's pants, d. Monthly depreciation on production equipment,

Which of the following statements best describes the long run adjustment in a monopolistic competition market...

Which of the following statements best describes the long run adjustment in a monopolistic competition market that has short-run profit? One or more competitors closes, increasing the demand for the output of an existing seller in the monopolistic competition. The existing seller’s profits increase and positive profit is sustained in the long run. One or more competitors opens, reducing the demand for the output of an existing seller in the monopolistic competition. The existing seller’s profits decline and the seller...

What adjustment must be made at the end of the accounting period for trading investments and...

What adjustment must be made at the end of the accounting period for trading investments and available-for-sale investments ?

1. Describe what is meant by a prior period adjustment, and give 2 examples. 2. List...

1. Describe what is meant by a prior period adjustment, and give 2 examples. 2. List and explain the advantages of a corporation. 3. List and explain the disadvantages of a corporation.

Which of the following best describes the condition(s) that must be present for the recognition of...

Which of the following best describes the condition(s) that must be present for the recognition of revenue? Group of answer choices Revenue is recognized at the end of each reporting period. Revenue is recognized when the good or service is provided and payment is collected. Revenue is recognized when no sales return is allowed. Revenue is recognized when the good or service is provided regardless if payment is received.

How do firms record prior-period adjustments? A. Prior-period adjustments are reported as adjustments to net income...

How do firms record prior-period adjustments? A. Prior-period adjustments are reported as adjustments to net income after taxes. If comparative statements are presented and the error is determined within the three-year income statement reporting period, the prior statements can not be restated. B. Prior-period adjustments are reported as adjustments to opening retained earnings, after taxes. The income and/or expenses of the current period can be changed by economic events and transactions that occurred in prior accounting periods. C. Prior-period adjustments...

1. Which of the following best describes a success scenario? - A statement that describes how...

1. Which of the following best describes a success scenario? - A statement that describes how certain decisions lead to success -A statement that defines what it means for the system to perform as intended -A statement of what could go wrong within a system -A statement of who, what, when, where and how a system would fail 2. Which of the following variable types represent measurable properties of a system itself? -Input Variables -Output Variables -Exogenous Variables -State Variables...

Q1. Outstanding cheques from the prior period which clear the bank in the current period? A....

Q1. Outstanding cheques from the prior period which clear the bank in the current period? A. should be deducted from the balance per bank. B. should be added to the balance per books. C. should be deducted from the balance per books. D. do not affect the current period’s bank reconciliation. Q2. Which of the following is not true with respect to the reporting of cash? A. Cash equivalents are normally combined with cash and reported as a current asset....

Which of the following best describes Federal Reserve policy during the 1961-2019 period?

Which of the following best describes Federal Reserve policy during the 1961-2019 period?a. The Fed followed pro-cyclical policy during 1987-2019, but not during 1961-1986.b. The Fed followed counter-cyclical policy during 1987-2019, but not during 1961-1986.c. The Fed followed pro-cyclical policy during the whole 1961-2019 period.d. The Fed followed counter-cyclical policy during the whole 1961-2019 period.

Subjects