Question

A prior period adjustment requires an adjustment to:

a. Income statement in the current year.

b. Beginning balance of retained earnings.

c. Ending balance of other comprehensive income.

d. Both a and b.

Answer 1

A prior period adjustment requires an adjustment to both the income statement in the current year and the beginning balance of retained earnings.

Step-by-step explanation:

A prior period adjustment requires an adjustment to either the income statement in the current year or the beginning balance of retained earnings. Therefore, the correct answer would be option d, both a and b.