A Prior Period Adjustment for Understatement of Net Income Will

question 77

Multiple Choice

A prior period adjustment for understatement of net income will

• A) be credited to the Retained Earnings account.
• B) be debited to the Retained Earnings account.
• C) show as a gain on the current year's income statement.
• D) show as an asset on the current year's Statement of Financial Position.

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Definitions:

Computer Supplies

Various items like paper, toners, disks, and other materials used with computers in an office or home setting.

Office Supplies

denotes consumable items like pens, paper, and printer ink that are used in an office setting for daily operations.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from the revenue earned from sales.

Sales Expense

Costs directly associated with the selling of goods or services, typically including advertising, sales staff salaries, and commissions.