A Prior-Period Adjustment That Corrects Income of a Prior Period

question 104

Multiple Choice

A prior-period adjustment that corrects income of a prior period requires an entry to:

• A) a liability account.
• B) an income statement account.
• C) retained earnings.
• D) an expense account.

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Definitions:

Batch Set-ups

The process of preparing and adjusting equipment and processes for a specific batch of production.

Complexity

The state or quality of being intricate or complicated, often used to describe systems, processes, or situations that are difficult to understand or manage.

Plantwide Overhead Rate

A single predetermined overhead rate that is used throughout a plant.

Departmental Overhead Rates

Specific overhead rates calculated for different departments within a company to more accurately assign costs.