A Prior Period Adjustment Is Reported as an Adjustment of the Beginning

question 66

True/False

A prior period adjustment is reported as an adjustment of the beginning balance of Retained Earnings.

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Definitions:

Cash Payments Journal

A financial journal that records all cash outflows or payments made by a business, including expenses, debt payments, and purchases.

Credit To Cash

A transaction in accounting where a credit sale is paid off, converting receivables into cash.

Accounts Payable

Liabilities of a business that represent money owed to suppliers or creditors for goods and services received.

Accounts Payable Subsidiary Ledger

A detailed record used to track amounts owed to suppliers or creditors separate from the general ledger.