A company made an error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment: a. on the Year 2 statement of retained earnings. b. on the Year 1 statement of retained earnings. c. accounted for with a cumulative "catch-up" adjustment in Year 2. d. on the Year 2 income statement. e. on the Year 1 income statement.
A company made an error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment: a. on the Year 2 statement of retained earnings. b. on the Year 1 statement of retained earnings. c. accounted for with a cumulative "catch-up" adjustment in Year 2. d. on the Year 2 income statement. e. on the Year 1 income statement.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 1MC: The cumulative effect of an accounting change should generally be reported as an adjustment to the...
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A company made an error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment:
a. on the Year 2 statement of
b. on the Year 1 statement of retained earnings.
c. accounted for with a cumulative "catch-up" adjustment in Year 2.
d. on the Year 2 income statement.
e. on the Year 1 income statement.
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