Correction of Errors in Prior Years

question 44

Essay

Correction of errors in prior years
Goldfinch Inc. reported net incomes for the last three years as follows: In reviewing the accounts in 2021 (after the books for the prior year had been closed), you find that the following errors have been made: Instructions
a) Calculate corrected net incomes for 2018, 2019, and 2020.
b) Prepare the entry required in 2021 to correct the books. Ignore income taxes.
Show any calculations.

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Definitions:

Distortions

Alterations or misrepresentations of reality or perception, often resulting in inaccurate conclusions or judgments.

Self-Report

A method of gathering data where participants provide information about themselves, typically through questionnaires or interviews.

Methodological Flaw

A deficiency or error in the design or execution of a research study that can compromise validity or reliability.

Social Desirability Bias

A tendency for respondents to answer questions in a manner that will be viewed favorably by others, often leading to inaccuracies in self-report measures.