A prior period adjustment that corrects income of a prior period requires that an entry be made to a current year revenue or expense account. the retained earnings account. an asset account. an income statement account.

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Business

Sunny

18 March, 09:47

A prior period adjustment that corrects income of a prior period requires that an entry be made to a current year revenue or expense account. the retained earnings account. an asset account. an income statement account.

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Kenzie · Answer 1

the retained earnings account

Explanation:

If we adjust against an expense or revenue accoutn we are posting the effect in the current accounting period as we close them at year-end.

We use common sence, the mistake was in a temporary account. Temporary account are closed against income summary. Once we close them all we transfer that into retained earnings. Thus, the permanent account influenced by the temporary account is retained earnings. We shold adjsut against this account to amend the mistake or change of method.