A prior period adjustment that corrects income of a prior period requires that an entry be made to

Question

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A prior period adjustment that corrects income of a prior period requires an adjustment to the retained earnings account, as it is the account that reflects the cumulative earnings of the company since its inception. A correction to this account will adjust the beginning retained earnings balance of the current period and will flow through to the current period's net income accordingly.

A Prior Period Adjustment That Corrects Income of a Prior