Question

Prior period adjustments are reported in the: Multiple Choice Multiple-step income statement. Statement of cash flows. Single-step income statement. Statement of retained earnings. Balance sheet.

Answer 1

Answer:

Statement of retained earnings.

Explanation:

The prior period adjustment refers to the adjustment in which there is an accounting error in the previous period and i.e to be reported in past year period but now it would be corrected in the financial statement. This adjustment we called prior period adjustment

Moreover, it should be reported in the statement of retained earnings

Hence, the second last option is correct