When an Income Statement Error That Does Not Affect the Balance

question 60

Multiple Choice

When an income statement error that does not affect the balance sheet is not found until after the books are closed, an entry ________.

• A) must be made to correct the error during the next year
• B) must be made to correct the error by reopening the books
• C) is not necessary, but financial statements must be recalled immediately
• D) is not necessary, but the income statement must be corrected before issue

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Definitions:

Self-Regulation

The ability to monitor and control one's own behaviors, emotions, or thoughts, aligning them with long-term goals.

Incremental Theorist

An individual who believes that abilities and intelligence can grow and change through effort and education.

Entity Theorist

Entity Theorist believes that personal qualities such as intelligence or talent are fixed and unchangeable traits, influencing how individuals approach challenges and learning opportunities.

Contractual Terms

The specific provisions or stipulations that define the agreement or contract, setting out the rights and obligations of each party.