The correction of an error in the financial statements of a prior period should be reflected, net of applicable income taxes, in the current
A) Income statement after income from continuing operations
B) Income statement before income from continuing operations
C) Retained earnings statement as an adjustment of the opening balance
D) Retained earnings statement after net income but before dividends

Question

Quizplus · Accepted Answer

Corrections of errors in the financial statements of a prior period are typically reflected as adjustments to the opening balance of retained earnings. This approach corrects the error retrospectively without distorting the current period's income statement.

The Correction of an Error in the Financial Statements of a Prior