A Company Made an Error in Calculating and Reporting Amortization

question 84

Multiple Choice

A company made an error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment:

• A) on the Year 2 income statement.
• B) on the Year 1 statement of retained earnings.
• C) on the Year 1 income statement.
• D) accounted for with a cumulative "catch-up" adjustment in Year 2.
• E) on the Year 2 statement of retained earnings.

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Definitions:

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