Corrections of prior period errors are
A) accounted for by retrospective adjustment.
B) deferred until the end of the useful life of an asset.
C) unnecessary because errors made that affect income reverse themselves in the next period.
D) accounted for by prospective adjustment.

Question

Quizplus · Accepted Answer

Corrections of prior period errors are accounted for by retrospective adjustment, which means adjusting the financial statements of prior periods as if the error had never occurred. This approach corrects the error in the period it occurred and restates prior period financial statements.

Corrections of Prior Period Errors Are