A Prior Period Adjustment for Depreciation Would Affect What Account

question 123

Multiple Choice

A prior period adjustment for depreciation would affect what account in the stockholders' equity section?

• A)Capital Stock
• B)Paid-in Capital in Excess of Par-Common Stock
• C)Retained Earnings
• D)Appropriations

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Definitions:

Allowance Method

An approach in accounting that calculates expected losses from bad debts by assessing uncollectible accounts at the conclusion of each period.

Estimated Bad Debts

A provision in accounting for the amount of receivables that are expected not to be collected, considered an expense.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned over during a period.

Specific Accounts

Refers to accounts designated for specific purposes or transactions, distinguishing them from general or combined accounts.