A Company Failed to Make an Adjusting Entry in the Prior

question 77

Multiple Choice

A company failed to make an adjusting entry in the prior year to accrue earned revenue. To correct this they should:

• A) Correct last year's statement by increasing Profit
• B) Correct this year's statements with a retrospective restatement increasing beginning retained earnings
• C) Correct this year's statements with a retrospective restatement decreasing beginning retained earnings.
• D) Correct this year's statements with a retrospective restatement increasing ending retained earnings.

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Definitions:

Use It or Lose It

a principle suggesting that failing to regularly engage skills or abilities can lead to their deterioration over time.

Managed Care Plan

A type of health insurance plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. It requires policyholders to receive care from a network of designated healthcare providers for the highest level of coverage.

Medically Necessary

A term used to describe medical services or supplies that are required to diagnose or treat an illness, injury, condition, disease, or its symptoms and meet accepted standards of medicine.

CMS-1500

A standard form used by healthcare providers to submit claims for services provided to patients covered by Medicare and other health insurance programs in the United States.