A prior period adjustment for depreciation would affect what account in the stockholders' equity section?

Question

Quizplus · Accepted Answer

A prior period adjustment for depreciation would affect Retained Earnings in the stockholders' equity section. This is because Retained Earnings is the account that accumulates all of the company's earnings or losses, including adjustments for prior periods. Depreciation is a non-cash expense that reduces the value of the company's long-term assets over time, and a correction to depreciation for a prior period would affect the company's net income and ultimately, Retained Earnings.

A Prior Period Adjustment for Depreciation Would Affect What Account