If a prior-period error only affects the balance sheet, the company should
A) discuss the error in the notes to the financial statements only.
B) restate the balance sheet from the prior year if it shows comparative financial statements.
C) make a correcting journal entry and restate the balance sheet for the prior year.
D) discuss the error in the notes to the financial statements and restate the balance sheet from the prior year.

Question

Quizplus · Accepted Answer

If the error only affects the balance sheet, the company should restate the balance sheet from the prior year if it presents comparative financial statements to ensure accurate presentation.

If a Prior-Period Error Only Affects the Balance Sheet, the Company