Which of the following is not a source of a prior-period adjustment?
A)a mathematical mistake
B)the incorrect use of existing facts
C)misuse of a generally accepted accounting principle
D)a change from using one GAAP estimate to another GAAP estimate

Question

Quizplus · Accepted Answer

A prior-period adjustment is made when there is an error in the financial statements from a previous period. Choices A, B, and C all indicate errors that could result in a prior-period adjustment. However, a change from using one GAAP estimate to another GAAP estimate is not considered an error but a change in accounting estimate, which would be accounted for prospectively rather than through a prior-period adjustment.

Which of the Following Is Not a Source of a Prior-Period