A company made an error in calculating and reporting amortization expense in 2016. The error was discovered in 2017. The item should be reported as a prior period adjustment:
A)on the 2016 statement of retained earnings.
B)on the 2016 income statement.
C)on the 2017 statement of retained earnings.
D)on the 2017 income statement.
E)accounted for with a cumulative "catch-up" adjustment in 2017.

Question

Quizplus · Accepted Answer

A prior period adjustment is reported on the statement of retained earnings in the year the error is discovered, which in this case is 2017.

A Company Made an Error in Calculating and Reporting Amortization