Prior period adjustments

Name: Prior period adjustments
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Prior period adjustments can either increase or decrease retained earnings depending on the nature of the adjustment. For example, if there was an error in the calculation of depreciation in a prior period and it was corrected in the current period, the adjustment would increase or decrease retained earnings depending on whether the prior period's depreciation expense was over or under-stated.

Prior Period Adjustments