Which of the Following Statements Is TRUE About Prior Period

question 94

Multiple Choice

Which of the following statements is TRUE about prior period adjustments?

• A) Prior period adjustments require a complete restatement of prior year financial reports.
• B) Prior period adjustments are shown on the statement of retained earnings as corrections to the beginning balance.
• C) Prior period adjustments affect balance sheet accounts only, and must be included on single-step income statements.
• D) Prior period adjustments must be included as a separate line item on a multi-step income statement.

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