A Company Made an Error in Calculating and Reporting Amortization

question 147

Multiple Choice

A company made an error in calculating and reporting amortization expense in 2015.The error was discovered in 2016.The item should be reported as a prior period adjustment:

• A)on the 2015 statement of retained earnings.
• B)on the 2015 income statement.
• C)on the 2016 statement of retained earnings.
• D)on the 2016 income statement.
• E)accounted for with a cumulative "catch-up" adjustment in 2016.

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Definitions:

Rational Decisions

Choices made based on logical analysis, considering all available information and potential outcomes in order to maximize benefit.

Biological Drives

Innate impulses that direct behavior, such as hunger, thirst, and the need for sleep.

Prohibitions

Strict rules or laws that forbid specific actions, behaviors, or the production and sale of certain goods.

Superiority

The state or condition of being superior, or higher in status, quality, or ability compared to others.