The Correction of a Material Error That Occurred in a Previous

question 9

Multiple Choice

The correction of a material error that occurred in a previous period must be accounted for by:

• A) disclosure in the notes to the financial statements.
• B) an adjustment in future accounting periods.
• C) a prospective adjustment to the financial statements.
• D) a retrospective restatement in the first financial statements issued after the discovery of the error.

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Definitions:

Rapid Movements

Quick, fast actions or motions, which can be physical movements of the body or parts of the body.

Horizontal

Oriented parallel to the ground or to the bottom and top edges of something, as opposed to vertical.

Vertical

Oriented upward, perpendicular to the horizon or a horizontal plane.

Rotary

Refers to something revolving around a center or axis, such as a rotary engine or a rotary dial.