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Describe how our system tries to strike a balance between ends and means. Describe the controversy this creates.
Prior Period Adjustment
Adjustments made to the financial statements of a prior period to correct errors or implement changes in accounting policy.
Retained Earnings Account
An equity account on the balance sheet that represents the accumulated net earnings not distributed to shareholders in the form of dividends.
Net Income
The final income of a company, achieved by subtracting expenses and taxes from the total revenues.
Income Tax Expense
The expense incurred by individuals or corporations due to taxable income, recognized in financial statements.
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