A Company Made an Error in Calculating and Reporting Depreciation

question 214

Multiple Choice

A company made an error in calculating and reporting depreciation expense in 2011. The error was discovered in 2012. The item should be reported as a prior period adjustment:

• A) on the 2011 statement of retained earnings.
• B) on the 2011 income statement.
• C) on the 2012 statement of retained earnings.
• D) on the 2012 income statement.
• E) accounted for with a cumulative "catch-up" adjustment.

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Definitions:

Descriptive Norm

A norm that describes how people actually behave in a given situation, rather than how they should behave.

Injunctive Norm

A social norm that prescribes how individuals should behave in a given context, based on the approval or disapproval of others.

Counternormative

Behaviors or practices that go against social norms or expectations, challenging conventional standards.

Negative Reinforcement

A behavior modification technique where the removal of an unpleasant stimulus strengthens the future behavior it follows.