Rickles,Inc

question 4

Multiple Choice

Rickles,Inc.is a calendar-year corporation whose financial statements for 2013 and 2014 included errors as follows: Assume that purchases were recorded correctly and that no correcting entries were made at December 31,2013,or December 31,2014.Ignoring income taxes,by how much should Rickles's retained earnings be retroactively adjusted at January 1,2015?

• A) $27,000 increase
• B) $27,000 decrease
• C) $7,000 decrease
• D) $3,000 decrease

---

Definitions:

Cartel Agreement

A formal, explicit agreement among competing firms to control prices, production, and market shares.

Cartelized Market

A market condition where a few suppliers act together to control prices or limit market competition.

Oligopoly

A market structure dominated by a small number of large firms, leading to limited competition and potentially higher prices for consumers.

Effective Collusion

A situation where firms in a market agree to act together instead of competing, often to fix prices or market shares, to maximize their profits.