Prior Period Adjustments ________

question 51

Multiple Choice

Prior period adjustments ________.

• A) always increase the beginning balance of retained earnings
• B) are shown on the statement of retained earnings as corrections to the beginning balance
• C) can be ignored because the financial statements have already been issued
• D) must be recorded in the period in which the error occurred

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Definitions:

Safety Stock

Additional quantity of an item held in inventory to reduce the risk of stockouts, often due to variability in supply or demand.

Memory Chips

Memory chips are semiconductor devices used in electronic systems to store data temporarily or permanently, such as RAM (Random Access Memory) or ROM (Read-Only Memory) in computers and other devices.

Minimum Cost

This refers to the lowest possible expense incurred in acquiring, producing, or maintaining a product or service without compromising quality or performance.

Marketable Securities

Liquid financial instruments that can easily be converted into cash, often used for short-term investments.