All of the following should occur as a result of a prior period adjustment EXCEPT
A) the cumulative effect of the correction or change should be reported as an adjustment to opening retained earnings.
B) all prior period financial statements should be corrected or restated.
C) the effects of the change should be detailed and disclosed in a note to the financial statements.
D) the unadjusted balance of retained earnings should be presented on the balance sheet.

Question

Quizplus · Accepted Answer

Prior period adjustments are corrections of errors or omissions in the financial statements of prior periods. They are accounted for by adjusting the opening balance of retained earnings of the earliest period presented, not by presenting an unadjusted balance of retained earnings on the balance sheet. Choices A, B, and C are correct actions for handling prior period adjustments.

All of the Following Should Occur as a Result of a Prior