A prior period adjustment may result in a debit or credit to a company's retained earnings account.

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A prior period adjustment is a correction made to the financial statements of a prior year. It can result in a debit or credit to a company's retained earnings account, depending on the nature of the adjustment. If the adjustment increases the net income of the prior period, it will result in a credit to retained earnings. If the adjustment decreases the net income of the prior period, it will result in a debit to retained earnings.

A Prior Period Adjustment May Result in a Debit or Credit