Corrections to the Beginning Balance of Retained Earnings for Errors

question 15

Multiple Choice

Corrections to the beginning balance of Retained Earnings for errors of an earlier period are called:

• A)extraordinary items.
• B)prior- period adjustments.
• C)cumulative effect of change in accounting principle.
• D)cumulative error adjustments.

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Definitions:

Equal Credit Opportunity Act

A U.S. federal law designed to ensure that all consumers have an equal chance to obtain credit, prohibiting discrimination.

Unauthorized Purchases

Transactions made without the permission of the account holder or beyond the scope of their authority.

Deceptive Claim

A false or misleading statement made about a product or service, typically for the purpose of deceiving consumers.

Material Misrepresentation

A false statement of fact made by one party to another, which, had the second party known the truth, it may have altered their decision to enter into a contract or agreement.