The correction of an error in the financial statements of a prior period should be reflected,net of applicable income taxes,in the current
A) income statement after income from continuing operations and before extraordinary items.
B) income statement after income from continuing operations and after extraordinary items.
C) retained earnings statement after net income but before dividends.
D) retained earnings statement as an adjustment of the opening balance.

Question

Quizplus · Accepted Answer

The correction of an error in the financial statements of a prior period is typically reflected as an adjustment of the opening balance of retained earnings. This approach corrects the error retrospectively, ensuring that the current and future financial statements present all periods accurately.

The Correction of an Error in the Financial Statements of a Prior