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TRUE OR FALSE?
A prior period error is not included in profit or loss but treated as an adjustment of the beginning balance of
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- Which of the statements below is false? If the net income of prior period is overstated because of the change in accounting policy, the effect is (A) deducted from the beginning retained earnings. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of (B) the prior period is overstated, the amount of the error uis deducted from retained earnings. Equity is also the net assets. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary D shares is more than the original issue of the preference shares, the difference is charged to retained earnings.f. What is the effect of these errors on Net Income, Earnings per Share, Total Liabilities and Retained Earnings if they are not discovered (detected) before the publication of the annual report? tWhy should the beginning retained earnings be adjusted for prior period errors and effects of change in accounting policy?
- unlike depreciation and retained earnings, the interest expense does not have to directly tie on any item on the balance sheet or income statement. True FalseComprehensive income does not affect net income or retained earnings.True FalseTrue or false Reclassification of an error will require an adjustment to the retained earnings account.
- If accrued liabilities are overestimated in the current period, the reported income in a following period will be lower than it should be. Select one: True False5. The following items affect the retained earnings account, except Group of answer choices a. net income or loss for the period b. prior period errors c. realization of revaluation surplus d. effect of change in accounting estimateCorrect Profit or Loss? Correct retained earnings ending balance?
- Which of the following is not a characteristic of non-counterbalancing error? a. If not detected, this is not automatically corrected in the next accounting period. b. The income statement of the period in which the non-counterbalancing error is committed is misstated. c. The statement of financial position of the year of non-counterbalancing error and succeeding statement of financial position are incorrect until the error is corrected. d. If the net income of one year is understated due to non-counterbalancing error, the net income of subsequent year is also affected.How do I find retained earnings without the net income? I am attaching the homework problem with the information given in the problemA debit balance in the Income Summary account represents a net loss. O True False