A Prior Period Adjustment That Corrects Income of a Prior

question 35

Multiple Choice

A prior period adjustment that corrects income of a prior period requires that an entry be made to

• A) an income statement account.
• B) a current year revenue or expense account.
• C) the retained earnings account.
• D) an asset account.

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Definitions:

Operating Segments

Operating segments refer to components of an enterprise for which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Identifying Factors

Elements or characteristics that can be used to recognize, classify, or differentiate between different subjects or objects.

Business Activities

Various actions undertaken by a company in pursuit of its commercial objectives, including operations, investing, and financing activities.