A prior period adjustment that corrects profit of a prior period requires that an entry be made to
A) an income statement account.
B) a current year revenue or expense account.
C) the retained earnings account.
D) an asset account.

Question

Quizplus · Accepted Answer

Prior period adjustments are directly recorded in the retained earnings account because they correct errors made in financial statements of prior periods, not affecting the current period's income statement.

A Prior Period Adjustment That Corrects Profit of a Prior