The occurrence that most likely would have no effect on 2014 net income is the
A) sale in 2014 of an office building contributed by a stockholder in 1961.
B) collection in 2014 of a dividend from an investment.
C) correction of an error in the financial statements of a prior period discovered subsequent to their issuance.
D) stock purchased in 1996 deemed worthless in 2014.

Question

Quizplus · Accepted Answer

The correction of an error in the financial statements of a prior period discovered subsequent to their issuance would not affect the net income of the current period (2014) because it relates to a prior period and would be adjusted against the retained earnings of that period, not against the current year's income.

The Occurrence That Most Likely Would Have No Effect on 2014