A Company Made an Error in Calculating and Reporting Amortization

question 23

Multiple Choice

A company made an error in calculating and reporting amortization expense in Year 1.The error was discovered in Year 2.The item should be reported as a prior period adjustment:

• A)on the Year 1 statement of retained earnings.
• B)on the Year 1 income statement.
• C)on the Year 2 statement of retained earnings.
• D)on the Year 2 income statement.
• E)accounted for with a cumulative "catch-up" adjustment in Year 2.

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Definitions:

Corpora Cavernosa

Two parallel chambers of spongy tissue in the penis or clitoris that fill with blood during sexual arousal, leading to erection.

Corpus Spongiosum

A spongy tissue surrounding the urethra that becomes engorged with blood during an erection, preventing the urethra from pinching closed.

Urethra

A tube that carries urine from the bladder to be expelled out of the body in both males and females, and also conveys semen in males.

Extraembryonic Membrane

Membranes surrounding the embryo that provide protection, nutrition, waste removal, and gas exchange during the development of amniotic eggs.