Every correction of an error that requires restatement of prior year financial statements requires a journal entry to increase or decrease the beginning balance of Retained Earnings.

Question

Quizplus · Accepted Answer

Not every correction of an error requires a journal entry to adjust the beginning balance of Retained Earnings. Some errors may be corrected by revising the affected financial statement line items within the prior period presented, without impacting Retained Earnings directly.

Every Correction of an Error That Requires Restatement of Prior